The Problem

G. Stuvel
Additional contact information
G. Stuvel: All Souls College

Chapter 1 in The Index-Number Problem and Its Solution, 1989, pp 3-12 from Palgrave Macmillan

Abstract: Abstract The measurement in relative terms of the price development of a single commodity such as granulated sugar from one date to another presents no problem. Of course, we must take care that the prices at the two dates relate to the same commodity, i.e. we must make sure that to all intents and purposes the quality and the packaging have not changed and that the commodity is sold through the same type of retail outlet, etc.1 However, once we are satisfied that indeed we are comparing like with like, all we have to do in order to express the price comparison in relative terms is to determine the ratio between the prices at the two dates. In index-number theory that ratio for a single commodity is called a price relative. When the price of commodity i at date 1, the current date, is compared with its price at date 0, the base date, the price relative, denoted by the symbol p i will be defined as (1.1) p i = P 1 i P 0 i $${p^i} = \frac{{P_1^i}}{{P_0^i}}$$ where P 1 i $$P_1^i$$ and P 0 i $$P_0^i$$ denote the prices of commodity i at dates 1 and 0 expressed in currency units per physical unit (say£s per ton). It is worth noting that p i , unlike P 1 i $$P_{1}^{i}$$ and P 0 i $$P_0^i$$ , is quite independent of the choice of units used in the measurement of prices.

Keywords: Price Relative; Index Number; Retail Prex; Price Development; Single Commodity (search for similar items in EconPapers)
Date: 1989
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pal:palchp:978-1-349-10816-9_1

Ordering information: This item can be ordered from
http://www.palgrave.com/9781349108169

DOI: 10.1007/978-1-349-10816-9_1

Access Statistics for this chapter

More chapters in Palgrave Macmillan Books from Palgrave Macmillan
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().