Question

Calculate consumer price index number for the following data by aggregate expenditure and family budget Method.

Expenses	Weights	Price (in ₹) Base Year	Price (in ₹) Current year
Food	45	300	350
Rent	20	200	225
Fuel	8	100	110
Clothing	10	150	175
Misc.	17	250	300

Answer 1

Aggregate expenditure Method

Expenses	Price in Base Year (p0)	Price in Current Year (p1)	Quantity (q0)	p0q0	p1q0
Food	300	350	45	13500	15750
Rent	200	225	20	4000	4500
Fuel	100	110	8	800	880
Clothing	150	175	10	1500	1750
Misc.	250	300	17	4250	5100
				Σp0q0 = 24050	Σp1q0 = 27980

Consumer price index for the current year

$=\frac{\mathrm{\Sigma }{p}_1{q}_0}{\mathrm{\Sigma }{p}_0{q}_0}\times 100=\frac{27980}{24050}\times 100=116.34$

Family Budget Method

Expenses	Price in Base Year (p0)	Price in Current Year (p1)	$R=\frac{p_1}{p_0}\times 100$	Quantity (q0)	p0q0 (W)	RW
Food	300	350	116.67	45	13500	1575045
Rent	200	225	112.5	20	4000	450000
Fuel	100	110	110	8	800	88000
Clothing	150	175	116.67	10	1500	175005
Misc.	250	300	120	17	4250	510000
					ΣW= 24050	ΣRW = 2798050

Consumer price index for the current year

$=\frac{\Sigma RW}{\Sigma W}=\frac{2798050}{24050}=116.34$