1. Measuring inflation using Laspeyres index
Nuffield Free-Standing Mathematics Activities
Measuring inflation using Laspeyres index

2. Laspeyres index
Do price rises affect everyone in the same way? How is the rate of inflation measured? In this activity you will study one way of doing this.

3. Laspeyres index Reflect on your work
What does a Laspeyres index of 106 mean?
What is the Laspeyres index value that suggests a 2% fall in prices?
Laspeyres index is a ‘fixed base’ index. What does ‘fixed base’ mean?
Give reasons why the Laspeyres index may not be very accurate.
How could the accuracy be improved?