Definitions
In plain terms
Under a widely used convention, increases receive one, unchanged observations one half, and decreases zero before scaling to 100.
Technical
A reproducible index fixes population, classification signal, tolerance for unchanged, weights, denominator, time, and missing values.
Scope
A value above 50 describes breadth under the chosen rule; it does not guarantee economic or market growth.
Formula
Diffusion index = 100 * (N_up + 0.5 * N_unchanged) / N_eligibleDI=100\frac{N_{up}+0.5N_{unchanged}}{N_{eligible}}| Symbol | Meaning | Unit |
|---|---|---|
N_up | eligible observations classified as increasing | observations |
N_unchanged | eligible observations classified as unchanged | observations |
N_eligible | eligible classified observations | observations |
Output unit: percent
Examples
- A Fintech Builder lesson can compute or identify Diffusion Index only after declaring its inputs, timing, and edge-case rules.
Common misconceptions
- A value above 50 describes breadth under the chosen rule; it does not guarantee economic or market growth.
Concept relationships
Where this concept is used
Evidence and governance
- Business Cycle Indicators: Diffusion Indexes The Conference Board · first party methodology
Supports: preferred label, short definition, technical definition, formula
Limits: Applying the general diffusion construction to sectors or factor groups is a declared Fintech Builder adaptation.
- Reviewed by
- fintech-builder-batch-005
- Last reviewed
- 2026-07-27
- Next review
- 2027-07-27
- Record status
- evidence reviewed
This record is evidence-reviewed and readable, but not yet promoted to published — it is served noindex,follow and excluded from the sitemap.