Fisher's index number is obtained by calculating the geometric mean of:

Question

Question

This question was previously asked in

SSC CGL Tier-II (JSO) 2022 Official Paper (Held On: 4 March 2023)

Answer 1

The correct answer is Laspeyre’s and Paasche’s index numbers

Key Points

Fisher's Index, commonly referred to as the Fisher Ideal Index, is an economic index number that procures the geometric mean of the Laspeyres and Paasche Index numbers. This technique is named in honour of the esteemed economist Irving Fisher who introduced this method.
The mathematical expression for Fisher's Index can be denoted as follows: Fisher's Index = √(Laspeyres Index × Paasche Index)
The Fisher Ideal Index is characterised as "ideal" as it successfully satisfies all the prevalent tests or axioms of index numbers, inclusive of the time reversal test and the factor reversal test.
The significance of the Fisher's Index lies in its balanced approach towards measurement.
- While the Laspeyres Index tends to lean towards quantities of the base period, the Paasche Index is biased towards quantities of the current period.
- Fisher's Index ingeniously combines these two to provide a more neutral and comprehensive measure.

Hence, the Fisher's Index is indeed procured by calculating the geometric mean of the Laspeyres and Paasche Index numbers.