What are the desirable properties of the base period?

The base period should have the following desirable properties:

1. The base year should not be either too short or too long: It should not be either less than a month or more than a year for calculation purpose.

2. The base year should not belong to too near or too far: Statisticians compare the current year’s conditions with the conditions in the base year. So, if the base year is too far from the current year, then the comparison becomes meaningless. Similarly, if the base year is too near to the current year, then comparison fails to capture the change in the taste, preferences, fashion, etc. Thus, in order to conduct a meaningful comparison, the base year should not be either too far or too near to the current year.

3. The base year should be so selected that the data for the same should be available: The data for a year should be available in order to regard that particular year to be the base year. This enables one to draw conclusions, inferences and for making comparisons.

4. The base period should be constantly updated: The base year should be constantly updated due to the changes in taste, preferences and fashion otherwise; the comparison becomes misleading or inconclusive.

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