ENGR.ECONOMIC ANALYSIS
ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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In an effort to analyze the effect of COVID 19 on health careexpenditure a research team in Healthystate considered 2019 to be the base year in calculating the Laspeyres Index. The following are data from 2018, 2019 and 2020

  Quantity 2018 Prices 2018 Quantity 2019 Prices 2019 Quantity 2020 Prices 2020
Oxygen Supply 150 100 170 110 2500 180
Pharmaceutical Products 500 270 750 250 1500 210
Intensive Care 50 2170 50 2200 500 2300
Elective surgeries 150 1870 130 2100 5 3500

Considering the base year as year "0"

a- calculate the Laspeyres index between 2018 and 2019

b- Calculate the Laspeyres index between 2019 and 2020

c- John claimed that since 2020 is an important year (since most of it was COVID 19 issues) we need to consider it as the base year. Calculate the Laspeyres index between 2019 and 2020. 

d- Why would there be a difference between the index in part c and the one in part b?

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