indexation

Indexation is the systematic linking of a value to a reference index so that the value can be adjusted over time or organized for efficient retrieval. It is used to preserve purchasing power, align payments with changes in costs, or structure information for quick access.

In economics and public policy, indexation most commonly adjusts wages, pensions, tax brackets, rents, or other benefits according to a price or cost index, such as the consumer price index (CPI) or a cost-of-living index. By applying a ratio of the current index to a base index, a base amount is scaled to reflect inflation or other price movements. This helps maintain real value without manual renegotiation and is used in some countries to stabilize social benefits, contracts, and financial instruments.

In finance, inflation-linked and index-linked securities tie payments to an index, providing real return protection against price changes. In corporate and personal finance, indexation helps preserve purchasing power over long periods and reduces the need for frequent renegotiation of terms.

In information technology, indexing refers to creating data structures or meta-data that enable fast search and retrieval. Document indexing extracts terms and organizes them to map queries to relevant records, while database indexing accelerates query processing by locating rows quickly.

Limitations include imperfect correlation between a chosen index and actual individual costs, time lags, and potential inequities when indices fail to reflect specific circumstances. See also inflation, CPI, index-linked securities, and search indexing.