
Chapter 16
684
Example 16.10
Applying Laspeyres’s method, compute the cost of living index number from the information
given in Table 16.26.
TABLE 16.26
Unit consumption of items in base year and the price in base year and the current year
Items Unit consumption
in base year
Price in base year
(in rupees)
Price in current year
(in rupees)
Rice (per kg) 150 20 23
Wheat (per kg) 100 14 17
Pulses (per kg) 40 30 42
Edible oil (per litre) 42 60 80
Sugar (per kg) 50 12 18
Soaps (per unit) 120 10 13
LPG (per cylinder) 12 270 330
Clothing (per metre) 50 70 100
Solution: The formula for calculating Laspeyres’s price index is given as:
I
pq
pq
La
10
00
100
Cost of Living ...