{"id":155910,"date":"2021-12-23T23:17:11","date_gmt":"2021-12-23T17:47:11","guid":{"rendered":"https:\/\/blog.forumias.com\/?page_id=155910"},"modified":"2021-12-23T23:17:11","modified_gmt":"2021-12-23T17:47:11","slug":"base-effect","status":"publish","type":"page","link":"https:\/\/forumias.com\/blog\/base-effect\/","title":{"rendered":"Base Effect"},"content":{"rendered":"<ul>\n<li>The base effect is the <strong>effect seen in the results<\/strong> after choosing a <strong>different reference point<\/strong> for a comparison between two data points.<\/li>\n<li>Using a different reference or base for comparison can lead to a <strong>large variation in ratio<\/strong> or percentage <strong>comparisons between data points<\/strong>.<\/li>\n<li>Because the <strong>base number makes up the denominator<\/strong> in the comparison, comparisons using <strong>different base values can yield widely varying results.<\/strong>\n<ul>\n<li>If the base has an abnormally high or low value it can greatly distort the ratio, resulting in a potentially deceptive comparison.<\/li>\n<\/ul>\n<\/li>\n<li>For example, the base effect can lead to an apparent under- or overstatement of figures such as <strong>inflation rates<\/strong> or <strong>economic growth rates<\/strong> if the point chosen for comparison has an unusually high or low value relative to the current period or the overall data.<\/li>\n<\/ul>\n<p>For example \u2013<\/p>\n<p>Case 1 \u2013 The price index of january 2016 is 110 and that of January 2017 is 120.<\/p>\n<p>Now Inflation of jan 2017 = (120-110)\/110 *100 which comes out to be 9.09%.<\/p>\n<p>Case 2 \u2013 The price index for March 2017 is 180 and that of March 2018 is 190. Now Inflation of March 2018 = (190-180)\/180*100 which comes out to be 5.55%.<\/p>\n<p>Now we see in both the case the increase in price index is 10 but the rate of inflation is different. This is due to the base effect.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The base effect is the effect seen in the results after choosing a different reference point for a comparison between two data points. Using a different reference or base for comparison can lead to a large variation in ratio or percentage comparisons between data points. Because the base number makes up the denominator in the&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/base-effect\/\">Continue reading <span class=\"screen-reader-text\">Base Effect<\/span><\/a><\/p>\n","protected":false},"author":10335,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"class_list":["post-155910","page","type-page","status-publish","hentry","entry"],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/155910","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10335"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=155910"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/pages\/155910\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=155910"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}