Multi Item (weighted) index numbers

Hello

I have watched your videos on index numbers as i watch all of your videos. I am also using kaplan as this has been funded for me but i’m confused by the multi item example in kaplan. I tried using the Lasperye method to the kaplan example and it doesn’t work, so what am i missing.

I understand both methods completely but the question in the kaplan states the following:

Selling Price 20X2 (£) Selling price 20X3 (£)

Product A 2 3

Product B 9 10

Product C 25 30

Quantity

Product A 4,000

Product B 3,000

Product C 1,000

The above is exactly the same as Laspeyre so i have taken the selling price multiplied by the quantity for both years. The total for 20X2 = 60,000 and the total for 20X3 = 72,000. Following Las method i have divided 72,000/60,000 = 1.2 * 100 = 120.

So i have a price index for 20X3 of 120

However, Kaplan have a price index of 131.6% and calculate it as follows

A 3/2*100 = 150 * 4000 = 600,000

B 10/9*100 = 111 * 3000 = 333,000

C 30/25*100 = 120 * 1000 = 120,000

They then take the total price index * quantity total which is 1,053,000 and divide by total quantity which is 8000 which = 131.6

Is this a completely different method to Laspeyre as there is no mention of Laspeyre in the kaplan book and the above is called multi item weighted index.

I am very confused by this so any help would be very much appreciated as i applied the multi weighted method to your example but i cannot get the same index, which makes me think they are totally different

Kind regards

Claire