Aside from the aggregated information provided by price and quantity indexes, there is growing interest in index decompositions that reveal the contribution of each index component to overall index change. In this paper, we derive a “natural” decomposition of the Fisher price index that is directly implied by its linear homogeneity in price relatives. The proposed “Euler” weights not only indicate the total contribution of each component to total index change but also reveal which component had the highest or lowest marginal impact. Our results can readily be generalized to any index that satisfies the linear homogeneity property.

Fisher index, besliskunde, decomposition, linear homogeneity
Index Numbers and Aggregation (jel C43), Corporate Finance and Governance (jel G3), Corporate Finance and Governance: Other (jel G39), Business Administration and Business Economics; Marketing; Accounting (jel M), Accounting (jel M41)
hdl.handle.net/1765/1220
ERIM Report Series Research in Management
Erasmus Research Institute of Management

Hallerbach, W.G.P.M. (2004). An Alternative Decomposition Of The Fisher Index (No. ERS-2004-022-F&A). ERIM Report Series Research in Management. Retrieved from http://hdl.handle.net/1765/1220