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 2008 is:
100
104.31
92.35
87.24
To shift the base year to 2007, we need to recalculate the index values using 2007 as the base year.
So, for the new index for 2008 using 2007 as the base year:
New Index for 2008 = (Old Index for 2008 / Old Index for 2007) * 100
New Index for 2008 = (121 / 116) * 100
New Index for 2008 = 104.31
Therefore, the new index for 2008 is 104.31.