This index number measures the changes in the level of value of items (i.e. the product of the quantity, and their prices) consumed during the year under reviews with reference to the level of value of the items consumed in the base year. The formula for calculating this index number is

V_{01} = (∑P1Q1 / ∑P0Q0) X 100

Where, V_{01} = Value index of the current year on the basis of the base year’s value.

∑P1Q1 = Total of the values of the items consumed in the current year.

∑P0Q0 = Total of the values of the items consumed in the base year.

However, this index number is not used in not used in vogue. The consistency of this index number is proved when it is equal to the product of the price index, and the quantity index in as much as the value of an item is the product of its price and quantity.