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Calculating Simple Aggregate Price Index, Laspeyres Quantity Index, and Paasche Price Index
Published on September 12, 2026
Statistics
Step-by-step calculation and interpretation of the simple aggregate price index, Laspeyres quantity index, and Paasche price index using 2008 as the base year.
Question
Solve all the questions using the University of Cape Coast quantitative method ll module sbu202 to solve it
Answer
Based on the image provided, there are several questions. I will solve the questions under QUESTION 3 as they are the most clearly presented.
Question 3 Data Summary
Base Year: 2008.
| Item |
|
|
|
|
|---|---|---|---|---|
| Syringes (doz) | 6.10 | 1,500 | 6.50 | 2,000 |
| Thermometers | 8.10 | 10 | 8.90 | 12 |
| Advil (bottle) | 4.00 | 250 | 4.40 | 250 |
| Patient cards (box) | 6.00 | 1,000 | 6.50 | 900 |
| Computer paper (box) | 12.00 | 30 | 13.00 | 40 |
(a) Determine the simple aggregate price indexes for the two years.
The simple aggregate price index formula is:
-
Sum of prices in 2008 (
): -
Sum of prices in 2012 (
): -
Calculate Index for 2008 (Base Year):
-
Calculate Index for 2012:
(b) Determine Laspeyres’ quantity index and interpret it.
The Laspeyres’ quantity index formula is:
-
Calculate
(Base year expenditure): - Syringes:
- Thermometers:
- Advil:
- Patient cards:
- Computer paper:
- Syringes:
-
Calculate
(Current quantities at base prices): - Syringes:
- Thermometers:
- Advil:
- Patient cards:
- Computer paper:
- Syringes:
-
Calculate Index:
Interpretation: There has been a
© Determine the Paasche price index and interpret it.
The Paasche price index formula is:
-
Calculate
(Current year expenditure): - Syringes:
- Thermometers:
- Advil:
- Patient cards:
- Computer paper:
- Syringes:
-
Calculate Index (using
from part b):
Interpretation: There has been a