Question

Construct Index number of the following data with Laspeyre's and Paasche's Methods:

Commodity	Base Year		Current Year
	Quantity	Price	Quantity	Price
A B C	10 8 5	0.80 0.85 1.30	11 9 5.5	0.70 0.90 0.80

Answer 1

	P0	q0	P0q0 (Col 1)	P1	q1	P1q1 (Col 2)	P0q1 (Col 3)	P1q0 (Col 4)
A B C	0.8 0.85 1.35	10 8 5	8 6.8 6.5	0.7 0.9 0.8	11 9 5.5	7.7 8.1 4.4	8.8 7.65 7.15	7 7.2 4
			ΣP0q0 = 21.3			ΣP1q1 = 20.2	ΣP0q1 = 23.60	ΣP1q0 = 18.2

$\text{Laspeyre's Price Index=}\frac{Col4}{Col1}\times 100$ $=\frac{18.2}{21.3}\times 100=0.8544\times 100=85.44$

$Passch{e}^{\prime }sPriceindex=\frac{Col2}{Col3}\times 100=\frac{20.2}{23.6}\times 100=0.8559932\times 100=85.59$