Index
An index is a number that indicates a change. An index series can be used to study, for example, the development of the price of a product.
An index series is constructed by selecting a base time to which the value of other time points are compared. The base time value is called the base value and is denoted by 100. The other values in the index series are obtained by dividing each value by the base time value and finally multiplying by 100.
Example 1. The table below describes the development of the daily price of a hotel room in 2014-2019. Make an index table of the data using 2014 as the base year.
Solution
Example 2. The table below describes the development of the price per kilo of rainbow trout in 2012-2018. Based on the data, create an index series when the base year is 2012. Also draw a line chart.
Solution
The index series can be used to see price developments in different years (compared to the base year):
If the index point is above 100, the price has risen.
If the index point is below 100, the price has dropped.
Example 3. The table shows movie ticket prices in 2014-2019.
Use an index series to calculate by how many percent the ticket price has risen from 2016 to 2019. The base time is 2014.
Draw a graph of the index series.
Solution
First, we create an index table
Now we have to compare the 2019 index with the 2016 index.
The price has gone up 25%.
Turn on the subtitles if needed
Exercises
1. Look at the table below, which describes the development of the price per kilo of oranges in 2015-2019. The base year for the index task is 2015.
a) What is the 2015 index point?
b) Calculate the 2017 index point.
c) Calculate the 2019 index point.
d) What percentage has the price has dropped from 2015 to 2016?
e) What percentage has the price has increased from 2017 to 2018?
2. The table lists the half-kilo packet of butter prices for the years 2014-2019. The base year for index is 2014.
a) Create an index table.
b) Calculate the 2017 index point.
c) What percentage has the price of a packet of butter changed in 2015 compared to 2014?
d) Draw a graph of the index series.
