The Making of Index Numbers

The Making of Index Numbers, published in 1922, stands as Irving Fisher's comprehensive exploration of price index methods and theory. This mathematical economics text examines different formulas and approaches for measuring price changes across time periods. Fisher analyzes over 130 types of index number calculations, testing them against specific criteria to determine their reliability and accuracy. The work establishes formal tests for index numbers and develops what became known as the "ideal index formula." The book presents actual price and quantity data from markets to demonstrate the practical application of various index methods. Fisher makes mathematical concepts accessible through clear explanations and real-world examples from commerce and trade. This foundational text shaped how economists and statisticians approach the measurement of price changes and economic activity. Its systematic framework for evaluating index numbers continues to influence modern economic analysis and price measurement methodology.

Readers find Fisher's text dense and mathematically rigorous. Many note it requires significant background in statistics and economics to follow the technical derivations and proofs. Readers praise: - Thorough examination of index number formulas - Clear explanations of test approaches for index accuracy - Historical data and real-world examples - Appendices with detailed calculations Common criticisms: - Complex notation makes it difficult to follow - Some sections are repetitive - Writing style can be dry and academic - Limited accessibility for non-technical readers Goodreads: 3.5/5 (4 ratings) WorldCat: No ratings available Amazon: No reviews available One economics professor on EconLib wrote: "Fisher exhaustively analyzes every conceivable index number formula, but the sheer number of equations can overwhelm readers." A graduate student reviewer noted: "The mathematical depth is impressive but makes it impenetrable without strong quantitative skills." Limited review data exists since it's primarily used as an academic reference rather than general reading.

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📚 Fisher studied over 134 different types of index number formulas in this 1922 book, testing them against his ideal criteria for accuracy 🔢 The book introduced the "ideal index formula" (now called Fisher index), which is still widely used today by governments and economists for calculating price indices 💡 Fisher spent $40,000 of his own money (equivalent to over $600,000 today) on calculating and verifying the numerous mathematical examples in the book 📈 The work was partially inspired by Fisher's personal experience with inflation during World War I, which motivated him to find better ways to measure price changes 🏛️ The methods developed in this book directly influenced how the U.S. Bureau of Labor Statistics calculates the Consumer Price Index, affecting everything from wage adjustments to Social Security payments