Chained calculation: Difference between revisions
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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 (e.g. in the case of a Laspeyres index) in order to calculate the index for all years. | 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 (e.g. in the case of a Laspeyres index) 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. | |||
https://en.wikipedia.org/wiki/Price_index#Chained_vs_non-chained_calculations | https://en.wikipedia.org/wiki/Price_index#Chained_vs_non-chained_calculations | ||
Revision as of 23:57, 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 (e.g. in the case of a Laspeyres index) 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.
https://en.wikipedia.org/wiki/Price_index#Chained_vs_non-chained_calculations