The geometric mean of Laspeyre’s and Paasche’s price indices is called Fisher’s price Index. Fisher price index uses both current year and base year quantities as weight. This index corrects the positive bias inherent in the laspeyres index and the negative bias inherent in the paasche index. Fisher’s price index is also a weighted aggregative price index because it is an average (G.M) of two weighted aggregative indices. The computational formula for the fisher ideal price index is:

**Problem:** Construct Fisher’s price index for the data given below: (Base = 2004). Also show that fisher’s index is the geometric mean of laspeyre and paache indices.

**Solution:**

### Fisher’s index is the geometric mean of laspeyre and paache indices

To check that Fisher’s index is the geometric mean of Laspeyre and Paache indices, we have

Here,

Therefore,

Hence it is proved that Fisher’s index is the geometric mean of Laspeyre and Paache indices.

good i am barani now woking in mba lecturer

I have taken MBA course from Sikkim Manipal University.This formula is not given in the book , but is asked in the assignments.I could answer with the help of the formula given.

The site is very helpful.Thanks

thank u so much.am a student in the university of nairobi.am taking a degree in economics and statistics.

So why is this a reasonable or useful way to describe production (as in the Federal Production Index)?

Thanks. Easy to understand

it helped me!!!!! very well

yess very helpfull to me too

a very comprehensive explanation! thanks

I am doing Distance Education MBA from sikkim Manipal university. This question has been asked in the assignment but not given in the text book. Thanks for the guidence….

Very good & useful website which lists out the definitions with related examples.

thank very much for this useful information, i am currently doing Msc in Statistics, the information is helpful to my study.

I am doing Msc in statistics, the website has been very useful for my studies.than you very much.

I am doing Msc in Statistics, the website has been very useful for my studies. Thank you very much.

the information is good. it has really helped me.

am a student at moi university eldoret..i do BM ..ths has helped me alot.thanks

found this site to be a true economic coach,it came through when i had a resit and had to do this myself,MOI UNIVERSITY

am a student at Masinde Muliro university. Thanks

Good job

hello m mba student from desh Bhagat university

thanks for helping to me

I am a student at Exploits University in Malawi, Blantyre campus studying BBA but this website mmmmm has assisted me a lot. I hav no problems with economics becz of here. Many thanks

the site is so helpful, especially in determining the pn,qn, po,qo,,, thenks alot,,,, student at UNIVERSITY OF KABIANGA, KENYA

thanks.it is really helpful

student at Maseno university doing BBA. thanks alot this site is very much helpful to me

tis help me a lot thank u very much

how do you calculate the indices when you are given three or more years instead of two?

interpretation there is net increase of price by 49.40% in 2008 compared to 2004