Essays on Constructing Price and Quantity Indices Assignment

Download full paperFile format: .doc, available for editing

The paper "Constructing Price and Quantity Indices" is a wonderful example of an assignment on macro and microeconomics. From the table below, we can note that the indices have different values in results. The main reason for the variations in the variables used in price weight co-variance. Laspeyres considers the quantity and price of the previous year when determining the index while Paasche considers only the quantity of the previous year   OZ ZIL PASS P_OZ P_Z P_PASS Laspeyres Index Paasche’ s Index Fisher Index 1986 4188000 460000 2149 9757 70 107 100 100.00 100.00 1987 4265000 504000 2247 9064 72 102 92.91 94.62 93.76 1988 4285000 451000 2199 8947 69 97 98.71 99.16 98.93 1989 3974000 458000 1760 8618 65 99 96.32 89.34 92.76 1990 4547000 397000 1566 8327 77 98 96.64 110.55 103.36 1991 4840000 529000 1455 7919 81 88 95.11 101.26 98.14 1992 5510000 528000 1653 7314 87 84 92.38 105.15 98.56 1993 5317000 556000 1583 7054 83 72 96.44 93.08 94.74 1994 5896000 590000 1537 6478 87 70 91.85 101.85 96.72 1995 6248000 436000 1510 5983 91 67 92.38 97.85 95.07 1996 6316000 393000 1459 5789 89 73 96.76 97.80 97.28 1997 6087000 353000 1517 5369 86 66 92.75 89.38 91.05 1998 6532000 376000 1409 5341 88 69 99.48 106.75 103.05 1999 6618000 371000 1601 5280 88 65 98.86 100.16 99.51 2000 6631000 365000 1533 5231 89 65 99.07 99.27 99.17   Fisher is a substitute effect of the two. It is calculated by finding the square root of the two indices.

The graph below shows the trend taken by indices. From the graph above, it can be noted that the indices have a similar trend except that they have different figures. The figures shown by the Paasache quantity index appear to be greater than those other types of indices except in the years 1989, 1993, and 1997. There is no unique explanation for the variation except for the covariance figures used. It can be noted from the graph that except for the three mentioned years, the trend of the Fisher index is below and above the Laspeyres index. (b) Laspeyres, Paasche and Fisher-price indexes for the three outputs  using the Direct method                       The direct method will not be preferable for these tasks because the amount of time required to calculate the indices is high.

It also requires care while calculating the components the indices

Download full paperFile format: .doc, available for editing
Contact Us