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Publish On: 2019-05-24

Guy white

Total Post: 819

Question: Express Marshall-Edgeworth method to construct index numbers

Reply On: 2013-07-13

Gaurabh Raghav

Total Post: 33

ANS: Express Marshall-Edgeworth method to construct index numbers

In this method also the current year as well as base year price and quantities are considered. The formula for constructing the index is :

p01 = Σ (q0 + q1) p1 / Σ (q + q1) p0 x 100

On opening the brackets

p01 = Σ p1 q0 + Σ p1 q1 / Σ p0 q0 + Σ p0 q1 x 100

It is a simple readily constructed measure, giving a very close approximation to the results obtained by the ideal formula.

 

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