Final answer:
The analyst should know how the index is calculated to assess its appropriateness for a specific purpose. This includes understanding the methodology, data collection, and impact of the population and sample size on the index's reliability.
Step-by-step explanation:
To judge whether an index is appropriate for a particular purpose, the analyst should know how the index is calculated. This involves understanding the methodology behind the index formation including the data collection process, computation, and adjustments made. Knowledge of the calculation gives insight into what the index measures and whether it is suitable for the analyst's intended analysis.
Additionally, knowledge of the population varies and how data was collected provides context to the reliability of the index. For example, a random sample which represents a larger population suggests that the index might be more generalizable. A study's sample size impacts the precision of the index, where larger sample sizes typically reduce sampling variability and increase the reliability of the statistics derived from the sample.