Chained calculation: Difference between revisions
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The chained version of an index may require more data points in order to calculate the index for all years. To give an example, the fixed-base version of the Laspeyres index does not require quantity data for all years (only for the base year), even to calculate the index for all years [https://en.wikipedia.org/wiki/Price_index#Relative_ease_of_calculating_the_Laspeyres_index]. In contrast, the chained version requires quantity data for all years. | The chained version of an index may require more data points in order to calculate the index for all years. To give an example, the fixed-base version of the Laspeyres index does not require quantity data for all years (only for the base year), even to calculate the index for all years [https://en.wikipedia.org/wiki/Price_index#Relative_ease_of_calculating_the_Laspeyres_index]. In contrast, the chained version requires quantity data for all years. | ||
==See also== | ==See also== | ||
==External links== | ==External links== | ||
* [[wikipedia:Price index#Chained vs non-chained calculations|Price index § Chained vs non-chained calculations]] | |||
==References== | ==References== | ||
Revision as of 23:59, 28 October 2017
In the context of price indices, a chained calculation means a calculation is done one increment at a time and then multiplied to produce the index for the target date. The increment is usually a year. A chained calculation is in contrast to a fixed-base calculation that calculates the target in one shot. In this sense a chained calculation is "path-dependent".
The chained version of an index may require more data points in order to calculate the index for all years. To give an example, the fixed-base version of the Laspeyres index does not require quantity data for all years (only for the base year), even to calculate the index for all years [1]. In contrast, the chained version requires quantity data for all years.