price index

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price index

n.
A number relating prices of a group of commodities to their prices during an arbitrarily chosen base period.
American Heritage® Dictionary of the English Language, Fifth Edition. Copyright © 2016 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

price′ in`dex


n.
an index of the changes in the prices of goods and services, based on the prices of a previous period, with the base level usu. expressed as 100.
[1885–90]
Random House Kernerman Webster's College Dictionary, © 2010 K Dictionaries Ltd. Copyright 2005, 1997, 1991 by Random House, Inc. All rights reserved.
ThesaurusAntonymsRelated WordsSynonymsLegend:
Noun1.price index - an index that traces the relative changes in the price of an individual good (or a market basket of goods) over time
index number, indicator, index, indicant - a number or ratio (a value on a scale of measurement) derived from a series of observed facts; can reveal relative changes as a function of time
retail price index - an index of changes in retail prices
producer price index, wholesale price index - an index of changes in wholesale prices
consumer price index, cost-of-living index, CPI - an index of the cost of all goods and services to a typical consumer
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References in periodicals archive ?
A Laspeyres price index is calculated as an arithmetic mean of a fixed bundle of goods and services, periodically adjusted to reflect changes in consumption and production patterns.
To calculate the Paasche volume measure for the arbitrary industry i, the industry's nominal output in period 0 is multiplied by its Laspeyres price index [P.sup.L.sub.it].
The Laspeyres price index is given by ([c.sub.1977] + [p.sub.2004][n.sub.1977])/([c.sub.1977] + [p.sub.2004][n.sub.1977]) = 1, because the initial consumption of computers is zero so that/71977 = 0.
high speed of removing goods and services of decreasing inflation significance and introducing new ones accounts for considerable difficulties in using the Laspeyres price index with fixed base.
(6.) Strictly speaking, [L.sup.t+1] is a chained Laspeyres price index since the weights on the prices are the previous period's quantities.
First and most importantly, Diewert (1976) has shown that the Tornqvist price index approximates to the second order of the underlying Konyus true cost of living index (Konyus, 1924); hence, by using the Tornqvist price index instead of the Laspeyres price index one can avoid the problem of substitution bias.
A Laspeyres price index calculates the cost of the original purchase quantities: two candy bars of each type.
(4) Technically, the CPI uses a fixed-weight Laspeyres price index while the PCE index uses a Fisher-Ideal chain-type price index.
(2) If a specific base period is set to 0, then the resulting index is referred to as a "fixed-weight Laspeyres price index."
In economics, the Laspeyres price index is a good example of this phenomenon.
[20] In this example, the Laspeyres price index shows an increase of 22.5% in the cost of living.
An alternative price measure is known as a Laspeyres price index, the formula for which is