The PCE price index is a Fisher index
that is formed using an identical method to the GDP deflator, but it excludes expenditures made by businesses, governments, and foreigners.
An alternative to the Fisher index
is the Tornqvist index which is also a widely used superlative index.
The ECPI estimator is based on two index formulas, the Fisher index
(1) and the unit value index.
One of the advantages of the Fisher index
is that the market basket is updated throughout the index, removing the inherent bias that would otherwise occur if the mix of goods changes over time.
In the second article, Harper, McMenamin, and Dyckman, add valuable context to the theoretical and logistical issues regarding the Fisher index
and Medicare physician reimbursement in general.
Using Equation 3, the Fisher index
from 1968 to 2003 is calculated using the geometric means of the Laspeyres and Paasche indexes.
5) Like the Fisher index
, the Tornquist index includes information on current period quantities and thereby allows for changing expenditure patterns.
Hence, the Fisher index
also can be written as the product of its components, making it possible to decompose it in the various ways proposed for the Tornqvist index.
Laboratory, nuclear medicine, hemodynamics, X-ray, radiotherapy, electrocardiograms, electroencephalograms, inhalotherapy, audiology and orthophony, physiotherapy, ergotherapy, and hemodialysis were aggregated using a Fisher index
The Fisher index
is a geometric average of the Laspeyres and the Paasche index.
The third column shows the Fisher index
(Equation 2), while the fourth shows the Tornqvist index (Equation 5).
In the new formulation, the weights are expressed as unit value added (a "price") to facilitate the aggregation of IP as an annually weighted Fisher index
for the recent period.
In section one, the challenges in the measurement of the contribution of each sector or industry to overall productivity change are identified as the effect of movement of labour between sectors and as the non-additivity introduced by the Fisher index
formula and by chaining.
Moreover, the Fisher index
series proved more robust to extreme fare values (6) than did the Tornqvist series.
A strong case can be made in favour of using the Tornqvist and Fisher index
formulae as both possess properties that are desired under the economic and axiomatic approaches.