Compared with alternatives, this object has a tendency to overstate increases because consumers normally opt not to buy produ
Compared with alternatives, this object has a tendency to overstate increases because consumers normally opt not to buy products with significant price increases; if such purchases are made without reductions in satisfaction, then this economic device also overstates reductions in standard of living. In computing it, a product's price is given a certain weight depending on its importance compared to other purchases during a base period. If the value of this index is one, then a set of goods bought in the previous period would cost the same in the current period. FTP, identify this price index defined by a German economist and contrasted with the Paasche index.
Compared with alternatives, this object has a tendency to overstate increases because consumers normally opt not to buy products with significant price increases; if such purchases are made without reductions in satisfaction, then this economic device also overstates reductions in standard of living.
the Laspeyres price index