7.24 I FUNDAMENTALS OF BUSINESS MATHEMATICS AND STATISTICS

Index Numbers

UNWEIGHTED INDEX

A. SIMPLE AVERAGE OF PRICE RELATIVE METHOD

u When Arithmetic mean is used

1

01 0

100

P N

Σ^ ×^

(^)

p
p
u When geometric mean is used
1
01 0
log 100
P Antilog N

Σ^ ×^

(^)

p
p
B. SIMPLE AGGREGATIVE METHOD
01 1
0
P = ΣΣpp × 100

WEIGHTED INDEX

A. WEIGHTED AGGREGATIVE METHOD

u Laspeyres’ Method

01 1 0

0 0

P = ΣΣp qpq × 100

u Paasche’s Method

01 1 1

0 1

P = ΣΣp qpq × 100

u Dorbish and Bowley’s Method

1 0 1 1

P 01 0 0 0 1 100

2

Σ + Σ

= Σ + Σ ×

pq pq

p q p q

u Fisher’s ‘Ideal’ Method

01 1 0^11

0 0 0 1

P = ΣΣp q p qpq × ΣΣpq × 100

u Marshall - Edgeworth Method

1 1 2

(^0112)
0

P^2100

2

Σ^ +^

(^)
= + ×
Σ (^)
p q q
p q q