What is Fisher Price Index?
The Fisher Price Index, named after the economist Irving Fisher, is a method used to calculate a price index, which is a measure of the average level of prices for a specified set of goods and services over a period of time. The Fisher Price Index seeks to address some of the shortcomings of other price indices, particularly the Laspeyres and Paasche indexes, by utilizing the geometric mean of the two.
The Fisher Price Index is believed to provide a more accurate measure of price changes compared to either the Laspeyres or Paasche index alone. It helps to mitigate some of the biases inherent in each of the individual indexes. By taking the geometric mean, it combines the advantages of both indexes while minimizing their disadvantages.
The Fisher Price Index is widely used in economics, finance, and government statistics to measure inflation or deflation and to adjust economic variables for changes in purchasing power.
How to Calculate Fisher Price Index?
Fisher Price Index calculator uses Fisher Price Index = sqrt(Laspeyres Price Index*Paasche Price Index) to calculate the Fisher Price Index, The Fisher Price Index formula is defined as a method used to calculate a price index that takes into account both the Laspeyres and Paasche indexes, addressing their respective biases. Fisher Price Index is denoted by FPI symbol.
How to calculate Fisher Price Index using this online calculator? To use this online calculator for Fisher Price Index, enter Laspeyres Price Index (LPI) & Paasche Price Index (PPI) and hit the calculate button. Here is how the Fisher Price Index calculation can be explained with given input values -> 402.4922 = sqrt(405*400).