Advertisements
Advertisements
Question
Write note on Fisher’s price index number
Advertisements
Solution
Fisher defined a weighted index number as the geometric mean of Laspeyre’s index number and Paasche’s Index number
`"P"_01^"F" = sqrt((sum"p"_1"q"_0 xx sum"p"_1"q"_1)/(sum"p"_0"q"_0 xx sum"p"_0"q"_1)) xx 100`
The Fisher-price index number is also known as the “ideal” price index number.
This requires more data than the other two index numbers and as a result, may often be impracticable.
But this is a good index number because it satisfies both the time-reversal test and factor reversal test.
i.e `"P"_01^"F" xx "P"_10^"F"` = 1
And
`"P"_01^"F" xx "Q"_01^"F" = (sum "p"_1"q"_1)/(sum"p"_0"q"_0)`
APPEARS IN
RELATED QUESTIONS
Index numbers that measure changes in the level of output or physical volume of production in the economy −
Device that measures changes in an economic variable or a group of variables over a period of time –
Construct Quantity index number from the given data:
| Commodity | A | B | C | D | E |
| Base year quantities | 170 | 150 | 100 | 195 | 205 |
| Current year quantities | 90 | 70 | 75 | 150 | 95 |
State the uses of cost of Living Index Number
Using the following data, construct Fisher’s Ideal index and show how it satisfies Factor Reversal Test and Time Reversal Test?
| Commodity | Price in Rupees per unit | Number of units | ||
| Basic year | Current year | Base year | Current year | |
| A | 6 | 10 | 50 | 56 |
| B | 2 | 2 | 100 | 120 |
| C | 4 | 6 | 60 | 60 |
| D | 10 | 12 | 50 | 24 |
| E | 8 | 12 | 40 | 36 |
Choose the correct alternative:
Laspeyre’s index = 110, Paasche’s index = 108, then Fisher’s Ideal index is equal to:
Choose the correct alternative:
Cost of living at two different cities can be compared with the help of
Compute the consumer price index for 2015 on the basis of 2014 from the following data.
| Commodities | Quantities | Prices in 2015 | Prices in 2016 |
| A | 6 | 5.75 | 6.00 |
| B | 6 | 5.00 | 8.00 |
| C | 1 | 6.00 | 9.00 |
| D | 6 | 8.00 | 10.00 |
| E | 4 | 2.00 | 1.50 |
| F | 1 | 20.00 | 15.00 |
The base year's index of a selected variable is assumed as ______.
Complete the correlation:
P0 : ______ : : P1 : Current year price.
