Which of the following is not weighted Index No. ?

Question

Accepted Answer

The correct option is 2:
The fundamental difference between index numbers lies in whether they are "weighted" or "unweighted." A weighted index number assigns different measures of relative importance (weights, usually quantity) to the commodities being tracked, reflecting their significance in the overall basket. An index number simply referred to as a "Price Index No." or "Simple Price Index" often implies an unweighted index, calculated using simple methods like the simple aggregate method or simple average of price relatives, where the consumption quantity of different goods is not factored in. This makes the general term "Price Index No." the best fit for an index that is *not* necessarily weighted, unlike the specific formulas presented in the other options.

The incorrect option is 1:
Laspeyre Index No. is a classic example of a weighted index number. It uses base year quantities as weights (q0) to measure the change in price levels, effectively determining how much the base year basket would cost today.

The incorrect option is 3:
The Edgeworth Marshall Index No. is also a weighted index number. It uses the average of the base year and current year quantities as weights, making it a form of fixed-weight index aimed at overcoming some limitations of either the Laspeyre or Paasche indices.

The incorrect option is 4:
The Dorbish Index No. (or Dorbish-Bowley Index) is calculated as the arithmetic mean of the Laspeyre and Paasche Price Index Numbers. Since both Laspeyre and Paasche are themselves weighted index numbers, the average of the two is also considered a weighted index.