When the information regarding the prices and quantities of consumption of different items are given
- Laspeyre’s Formula: The base year expenditure p0q0 is assigned as weight of the price relatives \(\frac{p_1}{p_0}\). It is denoted by symbol IL.
- Paasche’s Formula: The expenditure p0q1 of an item is assigned as the weight of the price relatives \(\frac{p_1}{p_0}\). It is denoted by the symbol Ip.
- Fisher’s Formula: The geometric mean of Laspeyre’s and Paasche’s index numbers is called Fisher’s index number and it is denoted by the symbol IF. Fisher’s index number is called an Ideal index number.
