Question
Construct the cost-of-living index number for 2020 on the basis of 2018 from the given data. Advice a donor agency on what course action to
Construct the cost-of-living index number for 2020 on the basis of 2018 from the given data. Advice a donor agency on what course action to take if the information is meant to help them make a decision on some food stipend being for a social protection program in Kenya.
Commodities | PRICE | Weights | |
2018 | 2020 | ||
A | 200 | 400 | 50 |
B | 200 | 350 | 40 |
C | 100 | 150 | 65 |
D | 80 | 120 | 45 |
E | 60 | 180 | 20 |
F | 90 | 157.5 | 60 |
G | 300 | 585 | 100 |
b. The average prices and quantities of six items grown in Nakuru County are shown in the following table:
2020 | 2021 | |||
Items | Price (Kshs/Kg) | Quantity (Kg,000) | Price (Kshs/Kg) | Quantity (Kg,000) |
Pineapples(A) | 10 | 6 | 14 | 8 |
Oranges(B) | 10 | 8 | 15 | 14 |
Bananas(C) | 15 | 8 | 20 | 16 |
Beans(D) | 30 | 12 | 25 | 20 |
Wheat(E) | 40 | 15 | 60 | 21 |
Millet(F) | 50 | 10 | 80 | 16 |
Using 2020 as base year, compute Kelly's and Fishers Price index numbers for 2021. Comment on the results.
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