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Index numbers

This topic has 1 reply, 2 voices, and was last updated 6 years ago by John Moffat.

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April 17, 2019 at 9:23 am #513226
czxy
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- Topics: 7
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What is Fisher’s ideal index? Is there a formula to calculate this? I came across the following question which asked for it:
Laspeyre index for price in 20X5 ( with base year of 20X0) 150
Corresponding Passche index 138.24
What is Fisher’s ideal index?
What is the logic behind Fisher’s ideal index and its relationship with these two numbers?
April 17, 2019 at 3:40 pm #513261
John Moffat
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- Topics: 57
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It is the square root of the Laspeyre index multiplied by the Paasche index. It is a better indicator than either of the two indices on their own (I explain the problems with Laspeyre and Paasche in my free lectures).
However it is not examined in Paper MA.
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