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Question
Construct the cost of living Index number for 2015 on the basis of 2012 from the following data using family budget method.
| Commodity | Price | Weights | |
| 2012 | 2015 | ||
| Rice | 250 | 280 | 10 |
| Wheat | 70 | 85 | 5 |
| Corn | 150 | 170 | 6 |
| Oil | 25 | 35 | 4 |
| Dhal | 85 | 90 | 3 |
Solution
| Commodity | Price | Weights (V) |
P = `"p"_1/"p"_0 xx 100` | PV | |
| 2012 (p0) |
2015 (p1) |
||||
| Rice | 250 | 280 | 10 | 112 | 1120 |
| Wheat | 70 | 85 | 5 | 121.43 | 607.15 |
| Corn | 150 | 170 | 6 | 113.33 | 679.98 |
| Oil | 25 | 35 | 4 | 140 | 560 |
| Dhal | 85 | 90 | 3 | 105.88 | 317.64 |
| Total | `sum"V"` = 28 | `sum"PV"` = 3284.77 | |||
Cost of living index number = `(sum"PV")/(sum"V")`
= `3284.77/28`
= 117.31
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