Question

Suppose you work for a national statistical agency and are asked to set up a program to collect data on and compute a consumer price index. How would you go about doing this?

Answer 1

• First Step: decide about the food and non-food items that should be considered for computing a consumer price index. Decision must be taken whether services should be selected or not.
• Second Step: now, sample of items prices should be collected that represent true prices prevailing across the country.
• third Step: Now collected data should be analysed if there is necessity to restructure whole process.
• Now appropriate index number formula should be used to calculate to date. Fisher Formula is considered ideal ones.