price index

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Index

A statistical measure of the value of a certain portfolio of securities. The portfolio may be for a certain class of security, a certain industry, or may include the most important securities in a given market, among other options. The value of an index increases when the aggregate value of the underlying securities increases, and decreases when the aggregate value decreases. An index may track stocks, bonds, mutual funds, and any other security or investment vehicle, including other indices. An index's value may be weighted; for example, securities with higher prices or greater market capitalization may affect the index's value more than others. One of the most prominent examples of an index is the Dow Jones Industrial Average, which is weighted for price and tracks 30 stocks important in American markets.

price index

price index

  1. a weighted average of the prices of a general ‘basket’ of goods and services produced in an economy over time, which is used in particular to indicate the rate of INFLATION. The RETAIL PRICE INDEX (RPI) is one commonly-used index, measuring the average level of the prices of final goods and services purchased by consumers. Each product in the index is weighted according to its relative importance in total consumer expenditure. A suitable base year is selected to commence the series (for example, index value 1990 = 100) and subsequent price changes are then reflected in changes in the index value over time (for example, 1999 = 200, indicating an annual rate of inflation of 10%). See INDEX-LINKED, PURCHASING POWER.
  2. a weighted average of the prices of particular classes of financial securities or commodities, for example the Financial Times 100 share index or all-share index. See SHARE PRICE INDEX.

price index

a weighted average of the PRICES of selected goods, services, commodities or financial assets measured over time. One commonly used price index is the CONSUMER PRICE INDEX (CPI), which measures the average level of the price of a general ‘basket’ of goods and services bought by final consumers. Each item in the index is weighted according to its relative importance in total consumers’ expenditure. Starting from a selected BASE YEAR (index value = 100), price changes thereafter are reflected in changes in the index value over time. Thus, taking the example of the UK Consumer Price Index (CPI), the current CPI base year is 1996 = 100; in 2004 the index value stood at 111, indicating that retail prices, on average, had risen 11% between the two dates. Such price indices can be used to measure the rate of INFLATION and as a GNP DEFLATOR. Another commonly used index of price is the Wholesale Price Index, which records the price of a ‘basket’ of goods measured in terms of wholesale prices.

In similar fashion, a SHARE PRICE INDEX such as the Financial Times Stock Exchange ( FTSE) - 100 share index is used to measure change in the price of STOCKS and SHARES over time. The TERMS OF TRADE index is used to measure the average prices of EXPORTS relative to IMPORTS over time. See PURCHASING POWER, FAMILY EXPENDITURE SURVEY, TRADE WEIGHTED INDEX.

References in periodicals archive ?
By construction, a Laspeyres index only considers the models sold in region-period js.
Such an implicit Tornqvist index of real GDP would be preferable to the Laspeyres index commonly used, in that it is a superlative index.
In this analysis, the Laspeyres index reports the relative change in per capita costs that would stem from the change in one component of expenditures, while the other three are kept at their base period levels.
The PPI is a fixed-weight or Laspeyres index, with base-period weights determined by values of receipts.
We chose the Laspeyres index over the Paasche index because the former maximized the available observations.
This aspect of index numbers is termed as upward bias in Laspeyres index and downward bias in Paasche index.
BLS uses a modified form of the Laspeyres index to calculate the IPP import and export price indexes.
Since the Federal Bureau of Statistics (Pakistan's official statistical agency) uses Laspeyres index formula for measuring inflation in period t over the base period, we would like to confine the following analysis to derive the Laspeyres index.
Q]) expressed as the difference between labour input growth by Laspeyres index and hours growth; the composition effect ([L.
The approach adopted by BLS is one that will be sustainable over time given the constraints imposed by factors such as the PPI's Laspeyres index framework and the fact that the PPI is a voluntary monthly survey completed by profit-maximizing firms.
Because the base period is necessarily updated with a time lag, the CPI is said to be based on a "modified" Laspeyres index.