wiz-icon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

What are the disadvantages in using Paasche's formula for the construction of a price index number?

Open in App
Solution

Paasche's index number, because of its dependence on given year's weight, has the distinct disadvantage that the weights are required to be revised and computed for each period, adding extra cost towards the collection of data.


flag
Suggest Corrections
thumbs-up
0
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Opportunity Cost and PPF
ECONOMICS
Watch in App
Join BYJU'S Learning Program
CrossIcon