Changing the base year in a price index affects the conversion of nominal values to real values
Is it true that changing the base year in a price index affects the conversion of nominal values to real values?
Changing the base year of a price index changes the values of the index across all periods, which directly alters the calculated real values when deflating nominal series.
Verdict: COMMON KNOWLEDGE · 0 sources for, 0 against · Last checked
The claim is a definitional and mathematical truth within economics and index number theory. Changing the reference base year scales price index values, altering the resulting real value conversions. No citation is needed for this basic economic identity.
What does the evidence say?
The claim is a definitional and mathematical truth within economics and index number theory. Changing the reference base year scales price index values, altering the resulting real value conversions. No citation is needed for this basic economic identity.
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