Question

Consider the following two index series:


2008=100 2012=100 2010=100
2007 94 A
2008 100 B
2009 115 C
2010 110 80 D
2011 90 E
2012 100 F
2013 115 G


Splice the two price index series to form one continuous series with 2010 as the base year.
Find the value of F.

Answer 1

To splice the two index series together, we need to convert all the values to a common base year, which in this case will be 2010.

For the first index series:
2007: 94 (to 2010 base year) = 94/100 * 110 = 103.4
2008: 100 (to 2010 base year) = 100/100 * 110 = 110
2009: 115 (to 2010 base year) = 115/100 * 110 = 126.5
2010: 110 (no change) = 110

For the second index series:
2011: 90 (to 2010 base year) = 90/100 * 110 = 99
2012: 100 (to 2010 base year) = 100/100 * 110 = 110
2013: 115 (to 2010 base year) = 115/100 * 110 = 126.5

Now we have a continuous index series with 2010 as the base year:
2007: 103.4
2008: 110
2009: 126.5
2010: 110
2011: 99
2012: 110
2013: 126.5

Therefore, the value of F in the continuous index series is 110.