The following data show energy prices and consumption in 198488 (analogous to the data in the chapter
Question:
The following data show energy prices and consumption in 1984–88 (analogous to the data in the chapter for the years 1999–2003).
(a) Construct a Laspeyres price index using 1984 as the base year.
(b) Construct a Paasche price index. Compare this result with the Laspeyres index. Do they differ significantly?
(c) Construct Laspeyres and Paasche quantity indices. Check that they satisfy the conditions that En = PL × QP etc.
Transcribed Image Text:
Prices Coal (£/tonne) Petroleum (£/tonne) Electricity (£/MWh) Gas (£/therm) 1984 49.60 149.70 28.89 0.2634 1985 51.00 151.75 30.02 0.2841 1986 49.64 72.98 30.07 0.2378 1987 47.50 78.10 28.92 0.2196 1988 43.10 55.04 30.02 0.2175
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ANSWER a To construct a Laspeyres price index we need to calculate the total expenditure for each year using the prices and quantities from the base year 1984 and then divide it by the total expenditu...View the full answer
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Related Book For
Statistics For Economics Accounting And Business Studies
ISBN: 978027368308
4th Edition
Authors: Michael Barrow
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