Paasche Index

The Paasche Price Index measures how the overall price of a group of goods and services changes over time, using current period quantities for comparison. It reflects the cost of purchasing the same basket of items today versus another period. Unlike other indices, it emphasizes current consumption patterns, so if people buy more of certain items, that influence is incorporated into the index. This helps in understanding inflation or price changes from the consumer's perspective, based on their latest shopping habits, making it useful for assessing how prices impact current spending.