Question

Calculate index numbers using Paasche’s method and Fisher’s method from the following data:
| Commodity | p_0 | q_0 | p_1 | q_1 |

Commodity p_1  q_1 p_0  q_0 
A 5 14 3 8
B 8 18 6 25
C 3 25 1 40
D 15 36 12 48
E 9 14 7 18
F 7 13 5 19

 

11 Jan 2025
Answer :
Word Count : 470
We are asked to calculate Paasche’s price index and Fisher’s price index from the given data. Let’s solve step by step manually. The formulas are: 1. Paasche’s Price Index (PPI): $$ P_P = \frac{\sum p_1 q_1}{\sum p_0 q_1} \times 100 $$ 2. Laspeyres Price Index (LPI) (for Fisher calculation): $$ P_L = \frac{\sum p_1 q_0}{\sum p_0 q_0} \times 100 $$ 3. Fisher’s Ideal Price Index (FPI): $$ P_F = \sqrt{P_P \times P_L} $$ --- Step 1: Compute Paasche’s Index $$ \sum p_1 q_1 = (5 \cdot 14) + (8 \cdot 18) + (3 \cdot 25) + (15 \cdot 36) + (9 \cdot 14) + (7 \cdot 13) $$ Calculate each term: * $5 \cdot 14 = 70$ ___ ___ ____ _________ _____ ___ _____ __________ __________ ________ ____ ____.
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