Marshall-Edgeworth Index number.
does not satisfy both factor reversal test and circular test of consistency
The Marshall-Edgeworth price index uses the sum of base- and current-period quantities as weights:
\[P_{01}^{ME}=\frac{\sum p_{1}(q_{0}+q_{1})}{\sum p_{0}(q_{0}+q_{1})}\]
Factor reversal test: requires \(P_{01}\cdot Q_{01}=\dfrac{\sum p_{1}q_{1}}{\sum p_{0}q_{0}}\). The cross-period terms in the Marshall-Edgeworth product do not cancel, so the test fails.
Circular test: requires \(P_{01}\cdot P_{12}\cdot P_{20}=1\). The weights depend on quantities of the periods being compared, so the chain does not collapse to 1; the test fails.
(Marshall-Edgeworth does, however, satisfy the time-reversal test.) Hence it satisfies neither the factor-reversal nor the circular test.
Similar Questions
What is the mode of the given data?
5, 7, 9, 7, 3, 7, 5, 7, 8, 6, 7
The prices (in Rs) of different yarns (per kg) in two consecutive years are as follows.
Commodity
Silk
Cotton
Jute
Rayon
Price(in 2016)
600
700
400
300
Price (in 2017)
700
600
480
270
By simple aggregative method, the net price changes in % is:
The 4 th decile for the given data is:
x
f
0
1
1
9
2
26
3
59
4
72
5
52
6
29
7
7
8
1
If the random sample size n is drawn without replacement from a finite population of size N, the correction factor for standard error of sample mean will be:
For the given figures of production of a sugar factory, the estimate of the production for 1976 using straight line trend with origin at the year 1972 by the least squares method (∑x = 0, ∑x 2= 28, ∑xy = 56) is:
Year
Production(‘000 tons) (year)
1969
76
1970
87
1971
95
1972
81
1973
91
1974
96
1975
90
Which of the following methods is NOT used in computation of a seasonal index for time series?
With reference to index numbers, which of the following statements is true?
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Important Questions from Elementary Statistics
In a colony 5 families have 1 child, 7 families have 2 children, 8 families have 3 children and 3 families have 4 children.What is the mode of the number of children.
What will be the difference between mean and median of the given data?
21, 11, 27, 8, 5, 12, 7, 23, 3, 14, 9, 19Find the mode and median of 3, 4, 5, 5, 3, 6, 7, 3, 5, 5, 6.
A. 5 and 5
B. 3 and 5
C. 5 and 4
D. 3 and 4
For which set of numbers do the mean, median and mode all have the same value?
The median of 5, 8, 25, 22, 34, 18 is
