Paascheútreikningum

Paascheútreikningum, often referred to as Paasche indices or Paasche quantities, are a type of index number used in economics and statistics to measure changes in aggregate values over time. They are named after German statistician Hermann Paasche. The defining characteristic of a Paasche index is that it uses current period quantities as weights when calculating the index. This means that the quantities of goods or services consumed or produced in the most recent period are used to determine the relative importance of each item in the index.

In contrast to Laspeyres indices, which use base period quantities as weights, Paasche indices reflect the consumption or production patterns of the current period. This can lead to different results when measuring changes in price or quantity. For example, a Paasche price index calculates the total cost of a basket of goods in the current period and compares it to the cost of that same basket in the base period, where the "basket" is defined by current period quantities. Similarly, a Paasche quantity index measures the change in the total quantity of goods and services, weighted by current prices.

The main advantage of Paasche indices is their ability to accurately reflect current consumption or production patterns. However, they also have a disadvantage: calculating them requires current period quantity data, which may not always be readily available or may be more costly to obtain than base period data. Consequently, Paasche indices are often more complex to compute than Laspeyres indices. Due to their reliance on current quantities, Paasche indices are sometimes considered to be upwardly biased compared to a true cost-of-living index. Despite this, they are a valuable tool for economic analysis when understanding changes in aggregate values based on contemporary conditions is crucial.