Sankhya: The Indian Journal of Statistics

1993, Volume 55, Series B, Pt. 2, 280--282

A COMMENT ON THE FACTORIAL APPROACH TO THE INDEX NUMBER CONSTRUCTION

By

ADAM SZULC, *Research Centre for Economics and Statistics*

SUMMARY. This paper examines validity of Banerjee's factorial experiments theory application to the index number construction. It is pointed out that this application is justifiable if and only if the Divisia equation system can be solved in general price level and total physical volume. Since it is not possible in general, the factorial approach fails when the index number problem is considered.

*AMS (1980) subject classification*. 62P20

*Key words and Phrases* Stuvel indices, factorial approach, general price level, total physical volume