User:Bkwillwm/Chain drift

Chain drift occurs in non transitive price indexes that are based on price and weight comparisons chained over time rather than direct indexes, a series of comparisons back to a single period. Under chain drift, all prices could return to their base period levels, but the index would not be equal to 1, so a change in prices would be implied when no change had occurred.

When indexes are transitive, there is no chain drift and a chained index will equal its corresponding direct index. When indexes are non-transitive, the choice of base period alters the resulting index.