“Index-Numbers” and Wages-Regulation

    Abstract

    IF we want to study the movements of prices, whether within some more or less narrowly defined group of commodities (e.g. foodstuffs or textiles) or over a wider range (e.g. all the commoner commodities consumed in the United Kingdom), the necessity is soon felt for some means of summarising the diverse fluctuations noted. This can be readily effected by taking some particular price of each commodity as a Standard (usually the price in a particular year or the average over a series of years), expressing the price of that commodity at any epoch as a percentage of the standard price—thus rendering the various movements comparable—and then averaging in some way for the whole series of commodities the index-numbers thus obtained. The average so calculated is usually itself termed an index-number of prices, with some qualifying expression to show to what it relates—e.g. an index-number of wholesale prices, of retail prices, or whatever it may be.

    References

    1. 1

      Cf. vols. v. and vi. of "The History of Prices”, by Tooke and Newmarch; the Mercantile Reports by Newmarch in the Journal of the Royal Statistical Society, vols. xxii., xxiii., and xxiv.; and the volumes of the Economist from 1864. The summary figure appears to have been first given in 1869.

    2. 2

      Reprinted in "Investigations in Currency and Finance” (Macmillan, 1864).

    3. 3

      Journ. Stat. Soc, vol. xlix, 1886; subsidiary papers and annual reviews since.

    4. 4

      Report No. 321, 1903, and later Labour Gazette or ” Annual Abstract of Labour Statistics”.

    5. 5

      Journ. Stat. Soc., March, 1921. The paper has also been separately printed.

    6. 6

      "The Present State of England” (London, 1822, and second edition,. 1823).

    7. 7

      Cd. 8980, 1918. Cf. also Cd. 76, 1919, on "Cost of Living of Rural Workers”, and the paper by Dr. A. L. Bowley on the measurement of changes in the cost of living, Journ. Stat. Soc, vol. Ixxxii., 1919.

    8. 8

      Indexes of "expenditure on od” as against food prices were given for some time during the war in the Labour Gazette.

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    “Index-Numbers” and Wages-Regulation. Nature 107, 513–515 (1921). https://doi.org/10.1038/107513a0

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