Scribd
Upload
846 views3 pages

Price Index Number Formulas Explained

The document provides a comprehensive list of various price index number formulas, including unweighted and weighted methods such as Laspeyres, Paasche, and Fisher's Ideal Price Index. It also outlines quantity index numbers and value index numbers, along with tests for consistency like the Time Reversal Test and Factor Reversal Test. Additionally, it mentions the Consumer Price Method and the Family Budget Method for calculating aggregate expenditure.

Uploaded by

vishal.sharma29730
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
846 views3 pages

Price Index Number Formulas Explained

The document provides a comprehensive list of various price index number formulas, including unweighted and weighted methods such as Laspeyres, Paasche, and Fisher's Ideal Price Index. It also outlines quantity index numbers and value index numbers, along with tests for consistency like the Time Reversal Test and Factor Reversal Test. Additionally, it mentions the Consumer Price Method and the Family Budget Method for calculating aggregate expenditure.

Uploaded by

vishal.sharma29730
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

LIST OF FORMULAE

1. Price Index Numbers


A. Unweighted Price Index :
x100
Simple Aggregate Method: }Po
Simple Average of PriceRelatives (using arithmetic mean): M
s Pi x100
Po
Po n

Simple Average of PriceRelatives (using geometric mean):


Po Antiloglog P
P=
Pl100
Po
B. Welghted Price Index :

Weighted Aggregate Method with fixed weight (W) : P,= Z Pow-x100


Laspeyre's Price Index: Po1 }P190 x100
Paasche's Price Index:
Po1 }Pi91 x100
2Po91

Fisher's ldeal Price Index. P190


VZ Pogo ,ZPi
Poi = X x100
Pog1
Po1 L+PP90,2P91100
Dorbish and Bouwley's Price Index: P, =
2
2|Po90 SPo4i
ndex Numbers
369
Marshall--Edgeworth's Price
Index: Po1 ZPi90 Pi91 100

Pos ZPiy9o91
Walsch's Price Index;
100

Kelly's Price Index:


Weighted Average of Price Relatives Method:LPi9,100
Pos
=

Ew PPo *100 S WP
() Weighted A.M. of Price Relatives: Po1
W
where P= Plx
Po
100 and Wis the weight attached to the price
relative P
(i) Weighted G.M. of Price Relatiwes : Poi = Antilog ZW log P where P= P,100
Po
2. Quantity Index Numbers :
A. Unweighted Quantity Index :

Simple Aggregate Method :


Qo 291
Z90
x 100

S1100
Sinple Average of Quantity Relatives : Co = (using arithmetic mean)

Or, Co Antilog n ix
go 100
(using geometric mean)
B. Weighted Quantity Index :
Weighted Aggregate Method :Any formula for quantity index based on weighted aggregate
method can be obtained from the corresponding formula for price index by sinply
interchanging p and q. Thus, for example,
Laspeyre's Quantity Index: 1Po-x100
Qo1 X4oPo
Paasche's Quantity Index: Qn = x 1 0 0 , and so on
9oP1

3. Value Index Numbers : LP191


Po4o
x100
4. Test of Consistency or Adequacy
Time Reversal Test: Po1 X Po= 1 (omitting the factor 100)

Po1 x o1 EP191
(omitting the factor 100)
Factor Reversal Test:
Po9o (omitting the factor 100)
Circular Test : Po1 x Pp x Po = 1
Index
5. Consumer Price
Z Pi40x 100
Method =
Aggregate Expenditure
Business Statistics

SWP
=
Family Budget Method w h e r e P= x100 and W- Po
W' Po
EXERCISE 8.1

You might also like