Test Index

Index Numbers and Time series

Question : 31 of 81

Marks: +1, -0

Solution:

Concept:

Drobish-Bowley price index is the arithmetic mean of Laspeyres and Paasche indices.

Explanation:

The Drobish-Bowley formula is defined as the simple arithmetic mean of the Laspeyres price index (

P_L

) and the Paasche price index (

P_P

That is:

P_{DB} = \frac{P_L + P_P}{2}

Answer:

Option B: arithmetic mean of Laspeyre's and Paasche's price index formulae.

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