Chain-type indexes

Quantity and price indexes that are based on the linking (chaining) of indexes for consecutive periods to form time series. In the NIPAs, annual changes in the quantities and prices calculated using a Fisher index formula that incorporates weights from 2 adjacent years are used to construct the chain-type indexes. These indexes eliminate the substitution bias found in indexes with unchanging (or “fixed”)weights, and their movements are not affected by the choice of the reference period.