Question

Calculate the Laspeyre’s, Paasche’s, and Fisher’s price index number for the following data. Interpret the data.

Commodities	Base year		Current Year
	Price	Quantity	Price	Quantity
A	170	562	72	632
B	192	535	70	756
C	195	639	95	926
D	187	128	92	255
E	185	542	92	632
F	150	217	180	314

Answer 1

From the index numbers, we conclude that for the same quantity, the price has reduced by 50.5% in the current year compared to the base year according to Laspeyre’s index. By the Paasche’s index number, we see that the price has reduced by 49.68% in the current year, and according to Fisher’s index number it has reduced by 49.9% in the current year.