Consider the following two price index series:



Year 1995 = 100
2002 80
2003 86
2004 90
2005 94


Year 2000 = 100
2005 115
2006 121
2007 130
2008 133


Splice the two index series to form one continuous series with 1995 as the base year. The index for 2004 is

1 answer

using the formula for splicing price indices:

New index for 2004 = Old index for 2004 (2000 = 100) * (New index for 2005 / Old index for 2005)

New index for 2004 = 90 * (115 / 94) = 109.574

Therefore, the index for 2004 using 1995 as the base year is 109.574.