The main uses of index numbers are given below:
- Index numbers are used in the fields of commerce, meteorology, labour, industrial, etc.
The index numbers measure fluctuations during intervals of time, group differences of geographical position of degree etc.
They are used to compare the total variations in the prices of different commodities in which the unit of measurements differs with time and price etc.
- They measure the purchasing power of money.
- They are helpful in forecasting the future economic trends.
- They are used in studying difference between the comparable categories of animals, persons or items.
Index numbers of industrial production are used to measure the changes in the level of industrial production in the country.
- Index numbers of import prices and export prices are used to measure the changes in the trade of a country.
The index numbers are used to measure seasonal variations and cyclical variations in a time series.