Index Numbers for SSC CGL Tier 2 for JSO Post

In SSC CGL Tier 2 SSC JSO, Index Numbers is an important topic under Statistical Methods. Index numbers are widely used in economics and statistics to measure changes in variables like prices, quantities, or values over time. This blog explains construction, types, formulas, and uses of index numbers in a simple way with examples for quick revision.

What are Index Numbers?

An index number is a statistical measure that shows relative change in a variable or group of variables over time.

• Example: Price of food items in 2024 compared to 2023.
• Helps in understanding trends like inflation, cost of living, and economic growth.

Basic Formula: Index Number=Value in Current PeriodValue in Base Period×100\text{Index Number} = \frac{\text{Value in Current Period}}{\text{Value in Base Period}} \times 100Index Number=Value in Base PeriodValue in Current Period​×100

If the index = 120 → The variable increased by 20% compared to the base period.

Also check out Most Repeated Quantitative Aptitude Questions for SSC CGL Tier 2

Construction of Index Numbers

Index numbers can be constructed using different approaches:

1. Price Index: Measures change in price level of goods/services over time.
2. Quantity Index: Measures change in quantity produced or consumed.
3. Value Index: Combines price and quantity to show total value changes.

Steps to Construct an Index Number:

Step	Description
1	Select base period and current period data.
2	Choose items to include in the index (e.g., essential goods).
3	Assign weights if needed (weighted index) or keep equal weights (unweighted index).
4	Apply formula to calculate index.

Also check out Most Repeated Quantitative Aptitude Questions for SSC CGL Tier 2

Types of Index Numbers

1. Unweighted Index Numbers: All items have equal importance.
   • Examples: Laspeyres, Paasche, Fisher (can be weighted versions as well)
2. Weighted Index Numbers: Items are given different weights based on importance.
   • Example: Cost of living index uses household expenditure weights.

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Uses of Index Numbers

Index numbers are widely used in economics, business, and statistics:

Use	Explanation / Example
Inflation Measurement	Consumer Price Index (CPI) shows rise in prices over time
Cost of Living	Measures how household expenses change
Production Trends	Industrial production index shows increase/decrease in output
Stock Market	Share price indices like Sensex, Nifty
Economic Planning	Government uses indices to decide policies

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Key Takeaways

• Index numbers measure relative changes over time.
• Base period selection is important for accuracy.
• Know formulas for Laspeyres, Paasche, and Fisher indices.
• Weighted indices are used when items have different importance.
• Frequently asked in data interpretation, statistics, and economic questions.

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