Module 5: Examples - Indices 

 

Number of employees and weekly wages, 1996 to 1998

Sector

Number of employees

Weekly wages (£)

 

1996

1997

1998

1996

1997

1998

 

q0

q1

q2

p0

p1

p2

Technical

180

210

225

470

505

540

Skilled

270

230

180

355

360

375

Operators

450

340

220

275

255

250

 

1)      Simple price index for 1997 and 1998

Calculation:

1997

1998

 

p1/ p 0

p2/ p 0

Technical

505/470

540/470

Operators

360/355

375/355

Skilled

255/275

250/275

 

 Answer:

1997

1998

Technical

107.45

114.89

Operators

101.41

105.63

Skilled

92.73

90.

2)      Simple aggregate indices for 1997 and 1998.

 

1996

1997

1998

 

p0

p1

p2

Technical

470

505

540

Skilled

355

360

375

Operators

275

255

250

Total(add)

1100

1120

1165

 

1100/1100

1120/1100

1165/1100

Answer:

1996

1997

1998

100

101.82

105.91

 

3)  Laspeyres price indices for 1997 and 1998.

 

1996

1997

1998

 

p0×q0

p1×q0

p2×q0

Technical

84600

90900

97200

Operators

95850

97200

101250

Skilled

123750

114750

112500

Total

304200

302850

310950

 

304200/304200

302850/304200

310950/304200

 

 

 

 

 Answer:

1997

1998

Laspeyres price

99.56

102.22

 

3)      Paasche price indices for 1997 and 1998 (assuming that 1998 is the current year).

 

1996

1997

1998

 

p0×q2

p1×q2

p2×q2

Technical

105750

113625

121500

Operators

63900

64800

67500

Skilled

60500

56100

55000

Total

230150

234525

244000

 

230150/23150

234525/230150

244000/230150

 Answer:

1997

1998

Paasche price

101.90

106.02

 

5) Price indices for 1997 and 1998 using average quantities as the weights.

 

 

1996

1997

1998

 

Average q

q×p0

q×p1

q×p2

Technical

205.00

96350.00

103525.00

110700.00

Operators

226.67

80467.85

81601.20

85001.25

Skilled

336.67

92584.25

85850.85

84167.50

 

Total

269402.10

270977.05

279868.75

 

 

269402.1/269402.1

270977.05/269402.1

279868.75/269402.1

 

 Answer:

1997

1998

Price Index

100.58

103.89

 

6) Laspeyres quantity indices for 1997 and 1998.

 

1996

1997

1998

 

p0×q0

p0×q1

p0×q2

Technical

84600

98700

105750

Operators

95850

81650

63900

Skilled

123750

93500

60500

Total

304200

273850

230150

 

304200/304200

273850/304200

230150/304200

 

 

 

 

 Answer:

1997

1998

Laspeyres Quantity

90.02

75.66

 

7) Paasche quantity indices for 1997 and 1998 (assuming that 1998 is the current year).

 

1996

1997

1998

 

p2×q0

p2×q1

p2×q2

Technical

97200

113400

121500

Operators

101250

86250

67500

Skilled

112500

85000

55000

Total

310950

284650

244000

 

310950/310950

284650/310950

244000/310950

 

 

 

 Answer:

1997

1998

Paasche Quantity

91.54

78.47