Distinguish between : Simple Index Number and Weighted Index Number
Q.2 (B) (iv) Distinguish between : Simple Index Number and Weighted Index Number
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Answer: Simple Index Number vs Weighted Index Number
| Basis | Simple Index Number | Weighted Index Number |
|---|---|---|
| Meaning | All items are given equal importance. | Items are given weights according to their relative importance. |
| Weights | No weights are assigned. | Weights (e.g. quantities) are assigned. |
| Calculation | Simple to calculate. | Calculation is more complex. |
| Accuracy | Less accurate and less realistic. | More accurate and realistic. |
| Formula | \(P_{01} = \dfrac{\sum p_1}{\sum p_0} \times 100\) | e.g. Laspeyres’ \(P_{01} = \dfrac{\sum p_1 q_0}{\sum p_0 q_0} \times 100\) |
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· 28 Oct 2026
AI-verified · Oct 2026
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