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Laspeyres Price Index Formula

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Laspeyres Price Index is a measure used in economics to calculate the average change in the price of a fixed basket of goods and services between two periods. Check FAQs

LPI = (\frac{\sum (x, 1, 2, (Pi F \cdot Qi B))}{\sum (x, 1, 2, (Pi B \cdot Qi B))}) \cdot 100

LPI - Laspeyres Price Index?Pi^F - Price in Final Period?Qi^B - Quantity in Base Period?Pi^B - Price in Base Period?

Laspeyres Price Index Example

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Here is how the Laspeyres Price Index equation looks like with Values.

Here is how the Laspeyres Price Index equation looks like with Units.

Here is how the Laspeyres Price Index equation looks like.

400 = (\frac{\sum (x, 1, 2, (40 \cdot 65))}{\sum (x, 1, 2, (10 \cdot 65))}) \cdot 100

400 = (\frac{\sum (x, 1, 2, (40 \cdot 65))}{\sum (x, 1, 2, (10 \cdot 65))}) \cdot 100

400 = (\frac{\sum (x, 1, 2, (40 \cdot 65))}{\sum (x, 1, 2, (10 \cdot 65))}) \cdot 100

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Laspeyres Price Index Solution

Follow our step by step solution on how to calculate Laspeyres Price Index?

FIRST Step Consider the formula

LPI = (\frac{\sum (x, 1, 2, (Pi F \cdot Qi B))}{\sum (x, 1, 2, (Pi B \cdot Qi B))}) \cdot 100

Next Step Substitute values of Variables

∴

LPI = (\frac{\sum (x, 1, 2, (40 \cdot 65))}{\sum (x, 1, 2, (10 \cdot 65))}) \cdot 100

Next Step Prepare to Evaluate

∴

LPI = (\frac{\sum (x, 1, 2, (40 \cdot 65))}{\sum (x, 1, 2, (10 \cdot 65))}) \cdot 100

LAST Step Evaluate

∴

LPI = 400

Laspeyres Price Index Formula Elements

Variables

Functions

Laspeyres Price Index

Laspeyres Price Index is a measure used in economics to calculate the average change in the price of a fixed basket of goods and services between two periods.

Symbol: LPI

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Laspeyres Price Index

Price in Final Period

Price in Final Period refers to the value of an asset or investment at the end of a specified period.

Symbol: Pi^F

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Price in Final Period

Quantity in Base Period

Quantity in Base Period refers to the quantity of goods, services, or assets measured at a specific base period for comparison purposes.

Symbol: Qi^B

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Quantity in Base Period

Price in Base Period

Price in Base Period refers to the present value or initial price of an asset or investment at the beginning of a financial analysis or investment period.

Symbol: Pi^B

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Price in Base Period

sum

Summation or sigma (∑) notation is a method used to write out a long sum in a concise way.

Syntax: sum(i, from, to, expr)

Other formulas in Equity category

Go Maximum Leverage Ratio

MLR = \frac{1}{IMR}

Go Margin Call Price

MCP = P 0 \cdot (\frac{1 - IMR}{1 - MMR})

Go Marshall-Edgeworth Price Index

MEI = \frac{LPI + PPI}{2}

Go Fisher Price Index

FPI = \sqrt{LPI \cdot PPI}

How to Evaluate Laspeyres Price Index?

Laspeyres Price Index evaluator uses Laspeyres Price Index = ((sum(x,1,2,(Price in Final Period*Quantity in Base Period)))/(sum(x,1,2,(Price in Base Period*Quantity in Base Period))))*100 to evaluate the Laspeyres Price Index, The Laspeyres Price Index formula is used to calculate a price index by fixing the quantities consumed at a base period. Laspeyres Price Index is denoted by LPI symbol.

How to evaluate Laspeyres Price Index using this online evaluator? To use this online evaluator for Laspeyres Price Index, enter Price in Final Period (Pi^F), Quantity in Base Period (Qi^B) & Price in Base Period (Pi^B) and hit the calculate button.

FAQs on Laspeyres Price Index

What is the formula to find Laspeyres Price Index?

The formula of Laspeyres Price Index is expressed as Laspeyres Price Index = ((sum(x,1,2,(Price in Final Period*Quantity in Base Period)))/(sum(x,1,2,(Price in Base Period*Quantity in Base Period))))*100. Here is an example- 400 = ((sum(x,1,2,(40*65)))/(sum(x,1,2,(10*65))))*100.

How to calculate Laspeyres Price Index?

With Price in Final Period (Pi^F), Quantity in Base Period (Qi^B) & Price in Base Period (Pi^B) we can find Laspeyres Price Index using the formula - Laspeyres Price Index = ((sum(x,1,2,(Price in Final Period*Quantity in Base Period)))/(sum(x,1,2,(Price in Base Period*Quantity in Base Period))))*100. This formula also uses Summation Notation (sum) function(s).

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Laspeyres Price Index Formula

Laspeyres Price Index Example

Laspeyres Price Index Solution

Laspeyres Price Index Formula Elements

Other formulas in Equity category

How to Evaluate Laspeyres Price Index?

FAQs on Laspeyres Price Index

Variable Name