Time And Factor Reversal Test Of Index Numbers Pdf

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The new index numbers, which were introduced in Chapter 3, were designed not only to avoid the one-sidedness of the Laspeyres and Paasche measures of volume and price change, but also to meet the requirements of multiplicative as well as additive analysis of value changes of commodity aggregates into a volume and a price component.

Factor Reversal Test Another test suggested by Fisher is known as factor reversal test. It holds that the product of a price index and the quantity index should be equal to the corresponding value index. If from one year to the next, both price and quantity should double, the price relative would be , the quantity relative , and the value relative

There are certain tests which are put to verify the consistency, or adequacy of an index number formula from different points of view. The most popular among these are the following tests:. At the outset, it should be noted that it is neither possible nor necessary for an index-number formula to satisfy all the tests mentioned above.

Tests of Consistency of Index Number

Several formulae have been suggested for constructing index numbers and the problem is that of selecting the most appropriate one in a given situation. The different tests are the unit test, time reversal test, factor reversal test, and circular test. This test states that the formula for constructing an index number should be independent of the units in which prices and quantities are expressed. All methods, except simple aggregative method, satisfy this test. Except for unweighted aggregative index number, all other indices satisfy this test.

Time Reversal Test:. This test guides whether the method works both ways in time forward and backward. According to Prof. Fisher, the formula for calculating an index number should be such that it gives the same ratio between one point of time and the other, no matter which of the two time is taken as the base.

In other words, when the data for any two years are treated by the same method, but with the base reversed, the two index numbers should be reciprocals of each other. If the product is not unity, the method suffers from time bias. The multiplying factor should not be considered during the test. Time reversal test is satisfied by. Factor Reversal Test :. It says that the product of a price index and the quantity index should be equal to value index. In the words of Fisher, each formula permit interchanging the prices and quantities without giving inconsistent results which means two results multiplied together should give the true value ratio.

The test says that the change in price multiplied by change in quantity should be equal to total change in value. If P01 is a price index for the current year with reference to base year and Q 01 is the quantity index for the current year. Then by factor reversal test. Hence it is called the ideal index number.

If in the use of index numbers interest attaches not merely to a comparison of two years, but to the measurement of price changes over a period of years. It is frequently desirable to shift the base. Clearly, the desirability of this property is that it enables us to adjust the index values from period to period without referring each time to the original base.

A test of this shift ability of base. A test of this shift ability of base is called to the circular test. This test is just an extension of the time reversal test. According to this, if indices are constructed for year one based on year zero, for year two based on year one and for year zero based on year two, the product of all the indices should be equal to 1.

An index which satisfies this test has the advantages of reducing the computations every time a change in the base year has to be made. Such index numbers can be adjusted from year to year without referring each time to the original bases.

The circular test is not met by the ideal index or by any of weighted aggregative with changing weights. This test is met by the simple geometric mean of price relatives and the weighted aggregative fixed weights.

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Explain the various tests of adequacy of Index Number.

This paper presents the results of a pilot test performed on a real medium voltage distribution network in Switzerland with the aim of assessing the performance of a fault location system relying on the Electromagnetic Time Reversal EMTR method. Complete the form below to receive an email with the authorization code needed to reset your password. Please try again. Answer 1 of 1 : Time reversal test states that if the time subscripts that are o and n of a price or a quantity index number formula be interchanged, then the resulting price or quantity index formula should be the reciprocal of the original formula. Nuclear physics tests of parity- and time-reversal invariance have both shaped the development of the Standard Model and provided key tests of its predictions. Full Record; Other Related Research The email has already been used, in case you have forgotten the password. Several formulae have been suggested for constructing index numbers and the problem is that of selecting the most appropriate one in a given situation.

The questions posted on the site are solely user generated, Doubtnut has no ownership or control over the nature and content of those questions. Doubtnut is not responsible for any discrepancies concerning the duplicity of content over those questions. Study Materials. Crash Course. Question :. Answer :. Explain the various segments of the NSE.

Index number was first constructed in:. Index number is specialised average designed to measure the change in a group of related variables over a period of time. An index number calculated with a single variable is called univariate index. When an index number is constructed from a group of variables is considered a composite index. Most widely used weighted index is:.

Tests of Consistency of Index Number

Time Reversal Test Prof. Irving Fisher has made a careful study of the various proposals for computing index numbers and has suggested various tests to be applied to any formula to indicate whether or not it is satisfactory. The two most important of these he calls the time reversal test and the factor reversal test. Time reversal test is a test to determine whether a given method will work both ways in time, forward and backward. If the product is not unity, there is said to be a time bias in the method.

INDEX NUMBERS Quantitative Aptitude & Business Statistics

However the problem still remains of selecting an appropriate method for the construction of an index number in a given situation. The following tests can be applied to find out the adequacy of an index number.

3 replies on “Tests for Adequacy of Index Number”

Консьерж покачал головой: - Невозможно. Быть может, вы оставите… - Всего на одну минуту. Она в столовой. Консьерж снова покачал головой: - Ресторан закрылся полчаса. Полагаю, Росио и ее гость ушли на вечернюю прогулку. Если вы оставите для нее записку, она получит ее прямо с утра.

 Верно! - сказал Беккер с экрана.  - Может быть, у этих элементов разное число протонов или чего-то. Если вычесть… - Он прав, - сказал Джабба, повернувшись к Соши.  - На этих таблицах есть числа.

 Верно, Шерлок Холмс. - Забавное имя. Сам придумал.

Услышав имя Дэвида, произнесенное вслух, Сьюзан дала волю своему горю. Сначала она едва заметно вздрогнула, словно от озноба, и тут же ее захлестнула волна отчаяния. Приоткрыв дрожащие губы, она попыталась что-то сказать, но слов не последовало.

Стратмор выключил телефон и сунул его за пояс. - Твоя очередь, Грег, - сказал. ГЛАВА 81 С мутными слезящимися глазами Беккер стоял возле телефонной будки в зале аэровокзала. Несмотря на непрекращающееся жжение и тошноту, он пришел в хорошее расположение духа. Все закончилось.

Мне кажется, что тут содержится некий намек на то, что это за цифра. В тексте названы Хиросима и Нагасаки, города, разрушенные атомными бомбами. Может быть, ключ связан с количеством человеческих жертв, оценочной суммой нанесенного ущерба в долларах… - Она замолчала, снова вчитываясь в текст.  - Слово разница особенно важно.

 - Ее слова словно повисли в воздухе. Все-таки он опоздал. Плечи Беккера обмякли.

Клушару эта идея понравилась. Он сел в кровати.

Сьюзан Флетчер вздохнула, села в кровати и потянулась к трубке. - Алло. - Сьюзан, это Дэвид. Я тебя разбудил. Она улыбнулась и поудобнее устроилась в постели.

Он пожал плечами: - Как только мы получим ключ, я проинформирую директора. Сьюзан не могла не поразить идея глобального прорыва в области разведки, который нельзя было себе даже представить. И он попытался сделать это в одиночку. Похоже, он и на сей раз добьется своей цели.

Пользователь писал письмо, пропускал его через специальную программу, и на другом конце линии адресат получал текст, на первый взгляд не поддающийся прочтению, - шифр. Тот же, кто перехватывал такое сообщение, видел на экране лишь маловразумительную абракадабру. Расшифровать сообщение можно было лишь введя специальный ключ - секретный набор знаков, действующий как ПИН-код в банкомате.

 Не имеет значения. Кровь не. Выпустите меня отсюда.

 Но… - Сделка отменяется! - крикнул Стратмор.  - Я не Северная Дакота. Нет никакой Северной Дакоты.

Коммандер. Нет. Сьюзан словно окаменела, ничего не понимая.

Каждую весну, когда частные фирмы начинают охоту за талантливой молодежью, соблазняя ее неприлично высокими окладами и фондовыми опционами в придачу, АНБ внимательно наблюдает за этим, выделяет наиболее подходящих и удваивает предлагаемую сумму. АНБ покупает все, что ему требуется. Дрожа от нетерпения, Сьюзан вылетела в Вашингтон.

ГЛАВА 15 Сьюзан Флетчер расположилась за компьютерным терминалом Третьего узла.


Mercy A.
05.04.2021 at 18:47 - Reply

Except for unweighted aggregative index number, all other indices satisfy this test​. Time Reversal Test: This test guides whether the method.

Adiel C.
07.04.2021 at 07:19 - Reply

Several formulae have been suggested for constructing index numbers and the problem is that of selecting the most appropriate one in a given situation.

Jermaine M.
07.04.2021 at 12:21 - Reply

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