The index number problem means that

Question

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The index number problem refers to the fact that different estimates of discrimination can be derived depending on which group is chosen as the reference group. This problem arises when trying to measure the difference in outcomes between different groups, such as wages between men and women, or test scores between different racial groups. Simply comparing the averages of these groups can be misleading, as there may be other factors at play. Instead, economists often use measures such as the percentage difference in outcome or the index number, but the choice of reference group can affect the magnitude and sign of these measures.

The Index Number Problem Means That