The average prices and quantities of six items grown in Nakuru County are shown in the following table: 2018 2020ItemsPrice (Kshs/Kg)Quantity (Kg,000)Price (Kshs/Kg)Quantity (Kg,000)Pineapples( A)104125Oranges(B)1561810Bananas(C)1061010Beans(D)20102220Wheat(E)30124018Millet(F)40105012 Using 2018 as base year, compute Laspeyre’s, Paasche’s, Kelly’s and Fishers Price index numbers for 2020. Comment on the results.Demonstrate that the computed Fisher’s ideal price index number and Kelly’s price index both are preferred to Laspeyre’s, and Paasche’s based on time reversal test.Demonstrate that the computed Fisher’s method is preferred to Laspeyre’s, and Paasche’s based on factor reversal test.

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Answered: The average prices and quantities of…

6th Edition

ISBN:9781119256830

Author:Amos Gilat

Publisher:Amos Gilat

Chapter1: Starting With Matlab

Section: Chapter Questions

Problem 1P

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The average prices and quantities of six items grown in Nakuru County are shown in the following table:

Using 2018 as base year, compute Laspeyre’s, Paasche’s, Kelly’s and Fishers Price index numbers for 2020. Comment on the results.
Demonstrate that the computed Fisher’s ideal price index number and Kelly’s price index both are preferred to Laspeyre’s, and Paasche’s based on time reversal test.
Demonstrate that the computed Fisher’s method is preferred to Laspeyre’s, and Paasche’s based on factor reversal test.

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