Search results
Results from the WOW.Com Content Network
The Marshall-Edgeworth index, credited to Marshall (1887) and Edgeworth (1925), [11] is a weighted relative of current period to base period sets of prices. This index uses the arithmetic average of the current and based period quantities for weighting. It is considered a pseudo-superlative formula and is symmetric. [12]
Hence, one may think of the Paasche index as one where the numeraire is the bundle of goods using current year prices and current year quantities. Similarly, the Laspeyres index can be thought of as a price index taking the bundle of goods using current prices and base period quantities as the numeraire.
The Laspeyres Formula is the weighted arithmetic mean based on the fixed value-based weights for the base period. The Ten-Day Price Index is a procedure under which, “sample prices” with high intra-month fluctuations are selected and surveyed every ten days by phone.
Ernst Louis Étienne Laspeyres (German: [lasˈpaɪrəs]; 28 November 1834 – 4 August 1913) was a German economist. He was Professor ordinarius of economics and statistics or State Sciences and cameralistics (public finance and administration) in Basel , Riga , Dorpat (now Tartu), Karlsruhe , and finally for 26 years in Gießen .
However, more practical formulas can be evaluated based on their relationship to the true cost of living index. One of the most commonly used formulas for consumer price indices, the Laspeyres price index, compares the cost of what a consumer bought in one time period (q 0) with how much it would have cost to buy the same set of goods and ...
For example, if we set equal to the mean of the characteristics for the previous period : , we would get a Laspeyres-type index. Setting equal to +: + gives Paasche-type index and so on. The Fisher-type index is defined as a square root of product of Laspeyres- and Paasche-type indexes.
SSE Indices are all calculated using a Paasche weighted composite price index formula. This means that the index is based on a base period on a specific base day for its calculation. The base day for SSE Composite Index is December 19, 1990, and the base period is the total market capitalization of all stocks of that day. [2] The Base Value is ...
The formula effect accounts for the different formulas used to calculate the two indexes. The PCE price index is based on the Fisher-Ideal formula, while the CPI is based on a modified Laspeyres formula. The weight effect accounts for the relative importance of the underlying commodities reflected in the construction of the two indexes.