base period

Base Period

A particular time period whose data is used for comparative purposes when measuring economic data of other periods.

Investopedia Commentary

Think of this as a yardstick for economic data. For example, if a price index has a base year of 1990, current prices are being compared to prices in that time period.

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See also: CPI, Economy, GDP, Index

base period

The time or period of time on which an index is based. Usually, the index is established at a value of 10 or 100 in the base year. The consumer price index of 177 in early 2002 indicated that consumer prices were 77% higher than during the base period of 1982-84. The Standard & Poor's 500 Stock Index of 1300 in early March 2002 indicated that, on average, a portfolio of blue chip stocks with a market value of $10 during the period 1941-43 (the base period) had a market value of $1,300 in early 2002. The portfolio of stocks making up the S&P 500 underwent substantial changes during the intervening years.