Construct the cost-of-living index number for 2020 on the basis of 2015 from the given data. Advice a donor agency on what course action to take if the information is meant to help them make a decision on some food stipend being for a social protection program in Kenya.
Construct the cost-of-living index number for 2020 on the basis of 2015 from the given data. Advice a donor agency on what course action to take if the information is meant to help them make a decision on some food stipend being for a social protection program in Kenya.
|
Commodities |
PRICE |
Weights |
|
|
2015 |
2020 |
||
|
A |
200 |
400 |
50 |
|
B |
200 |
350 |
40 |
|
C |
100 |
150 |
65 |
|
D |
80 |
120 |
45 |
|
E |
60 |
180 |
20 |
|
F |
90 |
157.5 |
60 |
|
G |
300 |
585 |
100 |
b. The average prices and quantities of six items grown in Nakuru County are shown in the following table:
|
|
2018 |
2020 |
||
|
Items |
Price (Kshs/Kg) |
Quantity (Kg,000) |
Price (Kshs/Kg) |
Quantity (Kg,000) |
|
Pineapples(A) |
10 |
6 |
14 |
8 |
|
Oranges(B) |
10 |
8 |
15 |
14 |
|
Bananas(C) |
15 |
8 |
20 |
16 |
|
Beans(D) |
30 |
12 |
25 |
20 |
|
Wheat(E) |
40 |
15 |
60 |
21 |
|
Millet(F) |
50 |
10 |
80 |
16 |
Demonstrate that the computed Fisher’s ideal price index number satisfies both time reversal and factor reversal tests.
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