Page 214 - DCOM203_DMGT204_QUANTITATIVE_TECHNIQUES_I

Unit 10: Index Number

Notes
Example: Calculate the weighted aggregative price index for 2010 from the
following data:
Price in Price in
Item Weights
2000 2010
A 8 9.5 5
B 12 12.5 1
C 6.5 9 3
D 4 4.5 6
E 6 7 4
F 2 4 3

Solution:
Calculation Table
Price in Price in Weights
Item p w p w
( ) 2010 p
w
2000 p 0 ( ) ( ) 0 1
1
A 8 9.5 5 40.0 47.5
B 12 12.5 1 12.0 12.5
C 6.5 9 3 19.5 27.0
D 4 4.5 6 24.0 27.0
E 6 7 4 24.0 28.0
F 2 4 3 6.0 12.0
Total 125.5 154.0
154.0
Price Index (2000 = 100) P 01 100 122.71
125.5
Note: The term within bracket, i.e., 2000= 100, indicates that base year is 2000.

Example: For the data given in the following table, compute
1. Laspeyres’s Price Index
2. Paasche’s Price Index
3. Fisher’s Ideal Index
4. Dorbish and Bowley’s Price Index

5. Marshall and Edgeworth’s Price Index

Commodity p 0 q 0 p 1 q 1
A 10 30 12 50
B 8 15 10 25
C 6 20 6 30
D 4 10 6 20

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