Consider the following quantity index series: Shift the base year of this index series to 2007.
Year 2005 = 100
2005 100
2006 106
2007 116
2008 121
The new index for 2005 is:
100
102.36
96.35
86.21
To shift the base year to 2007, we need to rebase the index according to the following formula:
Rebased Index = (Original Index / Index for old base year) x Index for new base year
For the year 2005:
Rebased Index = (100 / 116) x 116 = 100
Therefore, the new index for 2005 after shifting the base year to 2007 is 100.