The term 'Weight‘ refers to the relative importance of the different items in the construction of the index. For example in daily use the importance of wheat and rice is more than jute and iron.
Weights can be classified as follows -
(i) Explicit and Implicit weights : Explicit weights are called direct weight. They may be in the form of quantity or value. In implicit weighing, a commodity or its variety is included in the index a numbers of times.
(ii) Fixed and Fluctuating Weight : If same weights are used from year to year, they are called fixed weights. If weights are changed from time to time, they are called fluctuating weights.
(iii) Arbitrary and Real Weights : If real quantities or units are used, then those weights are called real weights.
If some unrealistic weights, according to the own will and assumptions of the investigator are used, they are called arbitrary weights.
Weights are used in construction of Index numbers because all items are not of equal importance and hence it is necessary to device some suitable method where by the varying importance of the different items is taken into account. This is done by allocating weights.
