Using the data in Problem 10.6 above, calculate how much the average consumer would need to be compensated for the rise in prices between 1990 and 1994.

Problem 10.6

The following table shows the weights in the retail price index and the values of the index itself, for 1990 and 1994.

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Food Alcohol Housing Fuel Household Clothing Personal Travel Leisure and and items goods tobacco light Weights 1990 205 111 185 50 111 69 39 152 78 1994 187 111 158 45 123 58 37 162 119 Prices 1990 121.0 120.7 163.7 115.9 116.9 115.0 122.7 121.2 117.1 1994 139.5 162.1 156.8 133.9 132.4 116.0 152.4 150.7 145.7