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Construct index numbers of prices in the...

Construct index numbers of prices in the year 2018 from the following data by using: (i) Laspeyre's Method, (ii) Paasche's Method, and (iii) Fisher's Method.

Text Solution

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(i) Laspeyre's Method:
`P_(01)=(Sigmap_(1)q_(0))/(Sigmap_(0)q_(0))xx100`
`=(200)/(160)xx100=125`
(ii) Paasche's Method: `P_(01)=(Sigmap_(1)q_(1))/(Sigmap_(0)q_(1))xx100`
`=(134)/(107)xx100=125.23`
(iii) Fisher's Method:
`P_(01)=sqrt((Sigmap_(1)q_(0))/(Sigmap_(0)q_(0))xx(Sigmap_(1)q_(1))/(Sigmap_(0)q_(1)))xx100`
`=sqrt((200)/(160)xx(134)/(107))xx100`
`=sqrt(1.5654)xx100`
`=1.2512 xx 100 = 125.12`
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