Question
What is a chain index?
Answer
A chain index is a special index type obtained by linking sub-indices in terms of time (multiplication); those refer to the previous year, which means that they have a weighting pattern that changes every year. What is characteristic here is that any two-period comparison (between 0 and t) is performed indirectly, that is by multiplying the annual sub-indices, rather than directly, that is only by including data of periods 0 and t as is the case for direct volume or price indices. For presentations, the chain index is referred to a specific reference year (e.g. year 2000 = 100), which however must not be confused with the price base year that has been used so far (for fixed price calculations).
