Index Numbers

• Calculating percentage change

  New number minus old number divided by old number times 100
• Base number in this example is 2018
• Labor productivity is indexed to 100
• Mistake with index numbers: Percentage change between 2018 and 2019 is not just two percent, it needs to be calculated
• Percentage change formula: New number minus old number divided by old number times 100
• Calculation for percentage change between 2019 and 2020: (106 - 102) / 102 * 100 = 3.92%
• Classic error in index numbers: Incorrectly assuming the percentage change between 2019 and 2020 is four percent