The basic types of index numbers in statistics are index, simple index and composite index numbers. Within these category-like types, the most commonly used types of index numbers are the price index and quantity index numbers.
As a whole, index numbers are employed to measure changes which can not be observed directly. For example, it is not possible to measure various changes within the business activities of a country directly, but relative changes within business activities can be studied by examining measurable value changes of factors affecting business activities.
These are statistical measures specifically designed to display changes in variables, or groups of variables, in relation to time periods, locations, professions or income, etc. A set of index numbers covering different locations, years, etc, is often referred to as an index series.
Simple index numbers measure relative changes of a single variable in relation to a specific base.
Composite index numbers measure average relative changes within a group of several relative variables in relation to a certain base.
Price index numbers are used to measure relative changes in the price of a product, or commodity, from one period to another. They may be used within a wholesale price index or a consumer price index. Usually the present, or current, price level is compared to a specific period in a previous month, year, decade, etc. This is known as the base period.
The quantity index numbers are used to measure the changes relating to the physical quantities of how many of an item or group of items were produced, sold or consumed.
A variety of examples of index types and fairly detailed information about the listed examples can be found at
MathWorld.
