Laspeyres Price Index Calculator
लास्पेयर्स मूल्य सूचकांक कैलकुलेटर
Calculate the Laspeyres Price Index to measure price changes using base year quantities as weights. Get detailed step-by-step solutions.
| Commodity | P₀ (Base Price) | P₁ (Current Price) | Q₀ (Base Quantity) | Action |
|---|
Where:
\( P_{01}^L \) = Laspeyres Price Index
\( P_0 \) = Price in base year
\( P_1 \) = Price in current year
\( Q_0 \) = Quantity in base year
\( \sum \) = Summation (total of all commodities)
| Commodity | P₀ | P₁ | Q₀ | P₀Q₀ | P₁Q₀ | Price Change % |
|---|
Laspeyres Price Index: Complete Guide
लास्पेयर्स मूल्य सूचकांक: पूरी मार्गदर्शिका
What is the Laspeyres Price Index?
The Laspeyres Price Index, developed by German economist Étienne Laspeyres in 1871, is a method of calculating inflation or price changes over time. It compares the cost of a fixed basket of goods and services in the current period with the cost of the same basket in the base period.
Complete Formula and Calculation
Laspeyres Price Index Formula:
\[ P_{01}^{L} = \frac{\sum P_1 Q_0}{\sum P_0 Q_0} \times 100 \]
Where:
- \( P_{01}^{L} \) = Laspeyres Price Index from period 0 to period 1
- \( P_0 \) = Price of each commodity in the base period (period 0)
- \( P_1 \) = Price of each commodity in the current period (period 1)
- \( Q_0 \) = Quantity of each commodity in the base period (period 0)
- \( \sum \) = Summation across all commodities
Advantages of Laspeyres Index
- Simple to Calculate: Requires only base year quantities
- Consistent Comparison: Uses fixed base year basket for consistent comparison
- Widely Used: Commonly used by statistical agencies worldwide
- Easy to Understand: Straightforward interpretation of results
Limitations of Laspeyres Index
- Upward Bias: Tends to overestimate inflation when quantities decrease
- Fixed Basket: Doesn’t account for changes in consumption patterns
- Substitution Bias: Doesn’t consider consumer substitution of cheaper goods
- Quality Changes: Difficult to account for quality improvements