An index number is a number that expresses the relative change in magnitude of a variable or number of variables during a specified period. The variable may be the price of a certain commodity, the quantitative production of certain goods, or the cost of living.  It is a statistical device to measure the level of certain phenomena in comparison with a certain period known as the base period, which may be a week month, year, or group of years.  The index numbers are known as economic barometers or economic indicators since they help in understanding the changes in economic conditions of the society.