Talk:Price index
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The formula for the index should be this: http://mathworld.wolfram.com/LaspeyresIndex.html
Note the use of a "n" or "t" subindex instead of 1 and 2 (which may lead to the belief that the index is chained as it only mentions two years).
This also applies for Paasche.
About the base year: http://eaindustry.nic.in/report/fin4.htm I think we should have an article about this :-)
[edit] Formula representation
Being new to this subject, I am a bit confused by the representation of the indexes given. I assume that the values p0 and q0 are constants since they are the values in the base year. Why then have they not been taken out as a factor, i.e. moved to the left of the sigma. Not doing so gives the impression that they are not constant. Indeed, q0 can be completely removed from the Laspeyres index since it cancels out. I think these formulas should be modified or at least an explanation added as to the reasons for the curious representation.
- I cleaned-up that notational mess a few days ago. —SlamDiego 05:15, 21 February 2007 (UTC)
[edit] is there no asset price index ?
This is a problem because the deflation item relates to here and deflation could also mean falling asset prices. So again is there an asset price index ? (housing + stocks + value of small companies etc.)
If we consider decrease of asset prices as deflation, then we would need to consider increase of asset prices as inflation. Therefore, we would be confusing asset bubbles (in houses or stocks) with the "cost of living", which is just what inflation/deflation tries to capture. However, I do agree that an index that measures the wealth of the avg. consumer is a long overdue task.
--200.11.34.59 23:01, 9 October 2006 (UTC)
