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Sum

**Base year weights (W) and current year price relatives (I) are given in Problem. Calculate the cost of living index in:**

Group |
Food |
Clothing |
Fuel & Lighting |
House Rent |
Miscellaneous |

I | 200 | 150 | 120 | 180 | 160 |

W | 30 | 20 | 10 | 40 | 50 |

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#### Solution

Group |
I |
W |
IW |

Food | 200 | 30 | 6000 |

Clothing | 150 | 20 | 3000 |

Fuel and Lighting | 120 | 10 | 1200 |

House Rent | 180 | 40 | 7200 |

Miscellaneous | 160 | 50 | 8000 |

Total |
– |
150 |
25400 |

From the table,

`sum"W" = 150, sum"W" = 25400`

Now, by Family Budget Method,

CLI = `(sum"IW")/(sum"W") = (25400)/(150)` = 169.33

Concept: Method of Constructing Cost of Living Index Numbers - Family Budget Method

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