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Irving Fisher (1867–1947) was an American Statistician born in New York and his father was a teacher. As a child, he had remarkable mathematical ability and a flair for invention. In 1891, Fisher received the first Ph.D in economics from Yale University. Fisher had shown particular talent and inclination for mathematics, but he found that economics offered greater scope for his ambition and social concerns. He made important contributions to economics including index numbers. He edited the Yale Review from 1896 to 1910 and was active in many learned societies, institutes, and welfare organizations. He was a president of the American Economic Association. He died in New York City in 1947, at the age of 80.
The students will able to
· understand the concept and purpose of Index Numbers.
· calculate the indices to measure price and quantity changes over period of time.
· understand different tests an ideal Index Number satisfies. understand consumer price Index Numbers.
· understand the limitations of the construction of Index Numbers.
Index number is a technique of measuring changes in a variable or a group of variables with respect to time, location or other characteristics. It is one of the most widely used statistical methods. Index number is a specialized average designed to measure the change in a group of related variables over a period of time. For example, the price of cotton in 2010 is studied with reference to its price in 2000. It is used to feel the pulse of the economy and it reveals the inflationary or deflationary tendencies. In reality, it is viewed as barometers of economic activity because if one wants to have an idea as to what is happening in an economy, he should check the important indicators like the index number of agricultural production, index number of industrial production, and the index number business activity etc., There are several types of index numbers and the students will learn them in this chapter.
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