Consider the following two price index series:
Year 1995 = 100
2002 80
2003 86
2004 90
2005 94
Year 2000 = 100
2005 115
2006 121
2007 130
2008 133
Splice the two index series to form one continuous series with 1995 as the base year. The index for 2006 is:
To splice the two index series together, we first need to convert the second series to 1995 as the base year.
For the second series:
Year 2000 = 100
2005 115
2006 121
2007 130
2008 133
To convert this series to 1995 as the base year, we divide each value by the 2000 value and then multiply by the 1995 value:
2005: (115/100) * 100 = 115
2006: (121/100) * 100 = 121
2007: (130/100) * 100 = 130
2008: (133/100) * 100 = 133
Now we have the second series with 1995 as the base year:
Year 1995 = 100
2005 115
2006 121
2007 130
2008 133
To splice the two series together, we take the values from the second series and continue on from where the first series left off:
Year 1995 = 100
2002 80
2003 86
2004 90
2005 94
2006 121
2007 130
2008 133
Therefore, the index for 2006 in the continuous series is 121.