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Question
Solve the following problem :
If `sum"p_"0"q"_0 = 120, sum "p"_0"q"_1 = 160, sum "p"_1"q"_1 = 140, and sum "p"_1"q"+0` = 200, find Laspeyre’s, Paasche’s Dorbish-Bowley’s and Marshall Edgeworth’s Price Index Number.
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Solution
Given,
`sum"p"_0"q"_0 = 120, sum"p"_0"q"_1 = 160`,
`sum"p"_1"q"_1 = 140, sum"p"_1"q"_0 = 200`
Laspeyre’s Price Index Number:
P01(L) = `(sum"P"_1"q"_0)/(sum"p"_0"q"_0) xx 100 = (200)/(120) xx 100` = 166.67
Paasche’s Price Index Number:
P01(P) = `(sum"P"_1"q"_1)/(sum"p"_0"q"_1) xx 100 = (140)/(160) xx 100` = 87.5
Dorbish-Bowley’s Price Index Number:
P01(D–B) = `("P"_01("L") + "P"_01("P"))/(2)`
= `(166.67 + 87.5)/(2)`
= `(254.17)/(2)`
= 127.085
Marshall-Edgeworth’s Price Index Number:
P01(M–E) = `(sum"p"_1"q"_0)/(sum"p"_0"q"_0) xx 100`
= `(200 + 140)/(120 + 160) xx 100`
= `(340)/(280) xx 100`
= 121.43
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