Description
adjustedPrice = observedPrice*(referenceQuality/observedQuality)^elasticity.
Historical price series need compatible quantities, quality, dates and currency conventions. Rebasing or splicing a series changes its numerical scale without resolving source comparability or proving a change in living standards.
adjustedPrice = observedPrice*(referenceQuality/observedQuality)^elasticity.
When to use this tool
Use Historic Price Quality Adjustment Caller Factor when checking a supplied historical price or index transformation.
How to use the tool and how it works
- Enter observedPrice, observedQuality, referenceQuality, elasticity. Use the units and conventions below.
- Run the tool. Correct any format, range, or cross-field input error before interpreting the output.
- Read adjustedPrice. Use the output convention below.
Require positive observedQuality and referenceQuality. adjustedPrice = observedPrice*(referenceQuality/observedQuality)^elasticity.1
| Input field | Meaning and units | Accepted input |
|---|---|---|
| observedPrice | Observed Price | Required. Finite number. |
| observedQuality | Observed Quality | Required. Finite number; strictly above 0. |
| referenceQuality | Reference Quality | Required. Finite number; strictly above 0. |
| elasticity | Elasticity | Required. Finite number. |
| Output field | Interpretation | Returned shape |
|---|---|---|
| adjustedPrice | Adjusted Price | Required. Finite number. |
{
"input": {
"observedPrice": 12,
"observedQuality": 2,
"referenceQuality": 3,
"elasticity": 1
},
"output": {
"adjustedPrice": 18
}
}Limitations and assumptions
- Quality scales and elasticity are supplied and must support the stated ratio. This is a conditional multiplicative adjustment, not an estimated hedonic model or proof of commodity comparability.
- Inputs must satisfy both the field types and the cross-field conditions above. Invalid input causes an error; a successful false flag or documented placeholder is a different result.
- Numeric calculations use binary floating point unless exact decimal-integer arithmetic is explicitly stated. No hidden measurement tolerance or decimal rounding is added; nonfinite or out-of-contract results are rejected. Numeric signed-zero results are exported as zero.
Alternative or Complementary methods
Verify the original quotation basis and comparable series concepts, and use appropriate historical evidence for quality and unit adjustments.
References
Similar or alternative tools
- Historic Grain Moisture Price Factor
dryUnitPrice = wetUnitPrice/(1-observedMoisture); referenceUnitPrice = dryUnitPrice*(1-referenceMoisture).
- Historic Commodity Freight Price Share
landedPrice is their sum; freightShare = freight/landedPrice.