Fisher’s Ideal Price Index

Definition

Fisher’s Ideal Price Index is a price index that measures the change in prices of a group of commodities over time by taking the geometric mean of the Laspeyres and Paasche price indices. It is called an ideal index because it satisfies both time reversal and factor reversal tests.

Formula

Fisher’s Ideal Index (F) = √(Laspeyres Price Index × Paasche Price Index)

Where:
Laspeyres = ( Σ P₁Q₀ ÷ Σ P₀Q₀ ) × 100
Paasche = ( Σ P₁Q₁ ÷ Σ P₀Q₁ ) × 100

Calculator (Single-Commodity Form)

Base Period Price (P₀) (₹ per unit)

Current Period Price (P₁) (₹ per unit)

Base Period Quantity (Q₀)

Current Period Quantity (Q₁)

Fisher’s Index > 100 → Price increase | = 100 → No change | < 100 → Price decrease

Fisher’s Ideal Price Index