Index (statistics)

In statistics and research design, an index is a composite statistic – a measure of changes in a representative group of individual data points, or in other words, a compound measure that aggregates multiple indicators. Indexes summarize and rank specific observations.

Much data in the field of social sciences is represented in various indices such as Gender Gap Index, Human Development Index or the Dow Jones Industrial Average.

Item in indexes are usually weighted equally, unless there are some reasons against it (for example, if two items reflect essentially the same aspect of a variable, they could have a weight of 0.5 each).

Constructing the items involves four steps. First, items should be selected based on their face validity, unidimensionality, the degree of specificity in which a dimension is to be measured, and their amount of variance. Items should be empirically related to one another, which leads to the second step of examining their multivariate relationships. Third, indexes scores are designed, which involves determining their score ranges and weights for the items. Finally, indexes should be validated, which involves testing whether they can predict indicators related to the measured variable not used in their construction.

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