Index numbers are used very commonly in the study of facts relating to the prices of commodities over a long period of time. When making comparisons by index numbers, conditions are selected which as nearly as possible represent the normal or typical conditions for the subject under consideration. The figures for other dates are then compared with the figures representing the normal conditions, by working on a percentage basis so that the figures for the normal conditions are taken as unity or 100 per cent. Figures for the conditions to be

GRAPHIC METHODS

compared with the normal are expressed in percentages, making the increases above normal in figures above 100 per cent and decreases below normal in figures below 100 per cent. Unfortunately, the reader not familiar with index numbers may not realize that a chart relating to index numbers should be read from the 100 per cent line rather than from the base of the chart. It is very common to find a chart relating to index numbers so drawn that the chart does not extend to the zero of the vertical scale. Such a chart may give a false impression of much more violent fluctuation than would be interpreted from a chart plotted on the usual co-ordinate field and showing the zero of the vertical scale.

Fig. 92 is taken from the United States Government Croj) Reporter, a magazine widely distributed to farmers.

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