Price Instability Index

Price Instability Index

Definition

Price Instability Index measures the degree of variation or fluctuation in prices of a commodity over a period of time. It indicates the extent of price volatility and is commonly measured using the coefficient of variation.

Formula

Price Instability Index (PII) = ( Standard Deviation of Prices ÷ Mean Price ) × 100

This is also called the Coefficient of Variation (CV).

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Higher index value indicates higher price instability.

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