Central tendency measure used to compare two or more series.
Face a problem of difference in units of measurement.
For example: Average height of students of a class is 100 cms, their average weight is 50 kgs.
Method of Index number helps to overcome this difficulty. That’s why it’s called specialized types of averages.
Describe the change in a group of related variables in terms of a single figure.
Within the group some goods might have become cheaper or costlier in comparison to others.
Mostly used for measuring changes over a period of time.
Compare the agricultural production, industrial production, imports, exports, wages etc at two different times.
Used to compare economic conditions of different areas or different industries.