CEVAP:

In the calculation of the Paasche price index, the current period quantities are used as weights, so it is also known as the current year weighted index. This is another weighted index. The Paasche uses the quantities from the current period rather than a base period therefore it may be said that it reflects the buying habits of today’s customers. Overall, it measures the change in the price of commodities, in terms of quantities related to the current period.