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Paasche Price Index Formula

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Paasche Price Index is used to measure the average change in the prices of a basket of goods and services between two periods. Check FAQs

PPI = (\frac{\sum (x, 1, 3, (Pi F \cdot Qi F))}{\sum (x, 1, 3, (Pi B \cdot Qi F))}) \cdot 100

PPI - Paasche Price Index?Pi^F - Price in Final Period?Qi^F - Quantity in Final Period?Pi^B - Price in Base Period?

Paasche Price Index Example

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

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

Here is how the Paasche Price Index equation looks like.

400 = (\frac{\sum (x, 1, 3, (40 \cdot 100))}{\sum (x, 1, 3, (10 \cdot 100))}) \cdot 100

400 = (\frac{\sum (x, 1, 3, (40 \cdot 100))}{\sum (x, 1, 3, (10 \cdot 100))}) \cdot 100

400 = (\frac{\sum (x, 1, 3, (40 \cdot 100))}{\sum (x, 1, 3, (10 \cdot 100))}) \cdot 100

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Paasche Price Index Solution

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

FIRST Step Consider the formula

PPI = (\frac{\sum (x, 1, 3, (Pi F \cdot Qi F))}{\sum (x, 1, 3, (Pi B \cdot Qi F))}) \cdot 100

Next Step Substitute values of Variables

∴

PPI = (\frac{\sum (x, 1, 3, (40 \cdot 100))}{\sum (x, 1, 3, (10 \cdot 100))}) \cdot 100

Next Step Prepare to Evaluate

∴

PPI = (\frac{\sum (x, 1, 3, (40 \cdot 100))}{\sum (x, 1, 3, (10 \cdot 100))}) \cdot 100

LAST Step Evaluate

∴

PPI = 400

Paasche Price Index Formula Elements

Variables

Functions

Paasche Price Index

Paasche Price Index is used to measure the average change in the prices of a basket of goods and services between two periods.

Symbol: PPI

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Paasche 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 Final Period

Quantity in Final Period refers to the quantity of goods, services, or assets measured at the end of a specified period.

Symbol: Qi^F

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Quantity in Final 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 Paasche Price Index?

Paasche Price Index evaluator uses Paasche Price Index = ((sum(x,1,3,(Price in Final Period*Quantity in Final Period)))/(sum(x,1,3,(Price in Base Period*Quantity in Final Period))))*100 to evaluate the Paasche Price Index, The Paasche Price Index formula is a measure used in economics to calculate the change in the overall price level of a variable basket of goods and services over time. Paasche Price Index is denoted by PPI symbol.

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

FAQs on Paasche Price Index

What is the formula to find Paasche Price Index?

The formula of Paasche Price Index is expressed as Paasche Price Index = ((sum(x,1,3,(Price in Final Period*Quantity in Final Period)))/(sum(x,1,3,(Price in Base Period*Quantity in Final Period))))*100. Here is an example- 600 = ((sum(x,1,3,(40*100)))/(sum(x,1,3,(10*100))))*100.

How to calculate Paasche Price Index?

With Price in Final Period (Pi^F), Quantity in Final Period (Qi^F) & Price in Base Period (Pi^B) we can find Paasche Price Index using the formula - Paasche Price Index = ((sum(x,1,3,(Price in Final Period*Quantity in Final Period)))/(sum(x,1,3,(Price in Base Period*Quantity in Final Period))))*100. This formula also uses Summation Notation (sum) function(s).

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Paasche Price Index Formula

Paasche Price Index Example

Paasche Price Index Solution

Paasche Price Index Formula Elements

Other formulas in Equity category

How to Evaluate Paasche Price Index?

FAQs on Paasche Price Index

Variable Name