Calculating an Index

J

Jay

Hi,

I have a series of data, which represents the mean sold price of an
item, with one value per day.

Could anyone please advise how I (robustly) create an Index based on
this data series. I've seen similar things elsewhere, where the index is
based on a base value of 100 but don't know where to start.

Any help greatly appreciated.

Regards,

Jason
 
G

Gary''s Student

An easy way to make an index is to represent each value as a percent up or
down from the base value. For example in A1 thru A10:

24,678
24,744
25,102
25,542
25,459
25,910
26,212
26,342
26,498
26,744
as our data. In B2 thru B10 enter:

=ROUND(A2*100/$A$1,0) and copy down. Column B is the index and you should
see:

24,678
24,744 100
25,102 102
25,542 104
25,459 103
25,910 105
26,212 106
26,342 107
26,498 107
26,744 108
 
J

Jay

Thanks for the reply. What about the base value? Is it purely abitrary
what value is chosen as the base value? The mean/median?

Many thanks,

Jason
 
B

Bill Ridgeway

At one time, my work was to produce statistical analysis. The way to
produce an index is, simply as follows -

where data is in a column starting A1 and the following-
=100*A1/$A$1
is in the column starting B1

Column B can, of course, be formatted to integer or n decimal places but an
integer is preferable wherever possible. This makes it easier to read
which, after all, is what the index is all about which is why it is normal
(and convenient) for an index to start at 100.

Regards.

Bill Ridgeway
Computer Solutions
 
G

Gary''s Student

Its just a reference point. A commonly agreed to starting point, like Social
Security or inflation indices.
 
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