Fixed And Chain Base Index Numbers

E. A. Selvanathan and D.S. Prasada Rao ()
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E. A. Selvanathan: Griffith University

Chapter Chapter 5 in Index Numbers, 1994, pp 111-139 from Palgrave Macmillan

Abstract: Abstract Fixed and chain base index numbers and their relative merits have been considered extensively in the literature. In all countries national accountants produce estimates of gross domestic product and its components at current prices and constant prices over lengthy time periods. Thus it is necessary to select index number formulae suitable for purposes of temporal comparisons involving long time series data on prices and quantities. Since the economic time series, at constant prices, are usually calculated with a particular year as the base period the choice of the methodology to arrive at such series is crucial. Two methodologies are available for this purposes. First, one may opt to compare each year with the base year using any of the formulae listed in Chapter 2. The second option is to arrive at a comparison between the current and base period through a series of link comparisons, each link comparison providing an index for a given year with the preceding year as the base. The former methodology leads to the idea of fixed base index numbers, where as the latter results in chain base index numbers.

Keywords: Price Index; Base Period; Index Number; Stochastic Approach; Generalize Little Square (search for similar items in EconPapers)
Date: 1994
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DOI: 10.1007/978-1-349-23594-0_5

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