Definition:Laspeyres Index
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Definition
Let the prices of a set of $k$ commodities in the base year be $p_{0 1}, p_{0 2}, \ldots, p_{0 k}$.
Let the quantities sold of each of those $k$ commodities in the base year be $q_{0 1}, q_{0 2}, \ldots, q_{0 k}$.
Let the corresponding prices and quantities of those $k$ commodities in the $n$th year after the base year be $p_{n 1}, p_{n 2}, \ldots, p_{n k}$ and $q_{n 1}, q_{n 2}, \ldots, q_{n k}$.
The Laspeyres index is the index number calculated as:
- $L_{0 n} = \dfrac {\ds \sum_j p_{n j} \, q_{0 j} } {\ds \sum_j p_{0 j} \, q_{0 j} }$
Also see
- Definition:Paasche Index, in which the weights are the current year quantities
- Results about the Laspeyres index can be found here.
Source of Name
This entry was named for Ernst Louis Étienne Laspeyres.
Historical Note
The Laspeyres index was devised by Ernst Louis Étienne Laspeyres in $1871$.
Sources
- 1998: David Nelson: The Penguin Dictionary of Mathematics (2nd ed.) ... (previous) ... (next): index (plural indices)${}$: 1. (index number)
- 2008: David Nelson: The Penguin Dictionary of Mathematics (4th ed.) ... (previous) ... (next): index (plural indices)${}$: 1. (index number)