In economics, how can we calculate the price index for a certain city?
“A number of different formulas, at least hundreds, have been proposed as means of calculating price indexes. While price index formulas all use price and quantity data, they amalgamate this data in different ways. A price index generally aggregate using various combinations of base period prices (p0),later period prices (pt), base period quantities (q0), and later period quantities (qt). Price index formulas can be framed as comparing expenditures (An expenditure is a price times a quantity) or taking a weighted average of price relatives (pt / p0).” Some of those formulas can be found on the link.
