Splicing of Index Numbers 🧶
Splicing means connecting two different series of index numbers to make them one continuous series. This is like knotting two ropes together.
When is it used? 🕰️
- Series A (Old): From 2000 to 2010 (Base 2000).
- Series B (New): From 2010 to 2020 (Base 2010).
- We want a single series from 2000 to 2020. Since the weights and items might have changed in 2010, we have two disjoint series. Splicing joins them at the overlap year (2010).
Types of Splicing 🧵
1. Forward Splicing
Adjusting the Old Series to make it continuous with the New Series. (Result is based on New Base).
Spliced Index = (Old Index * New Index of Common Year) / 100
2. Backward Splicing (More Common)
Adjusting the New Series to make it continuous with the Old Series. (Result is based on Old Base).
Spliced Index = (New Index * Old Index of Common Year) / 100
Example (Backward Splicing) 📝
Given:
| Year | Old Series (Base 2000) | New Series (Base 2010) |
|---|---|---|
| 2009 | 180 | - |
| 2010 | 200 | 100 |
| 2011 | - | 110 |
| 2012 | - | 120 |
- 2010 is the overlap/common year.
- Old Index of Common Year = 200.
Task: splice New Series backwards to Old Base (2000).
Solution for 2011:
(110 * 200) / 100 = 220
Solution for 2012:
(120 * 200) / 100 = 240
Final Series (Base 2000): 2009: 180 2010: 200 2011: 220 2012: 240
Summary
- Splicing connects disjoint series.
- Common Year (Overlap Year) is the key link.
- Usually done to maintain historical continuity when government updates the index base year.
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