Splicing of index numbers mean s converting the two, or more series of index numbers of different bases into a continuous series of index numbers of a common base.This is possible only, if the following conditions are satisfied :
- All such series of index numbers must have been constructed with the same items.
- All such series of index numbers must have different base year.
- All such index series must have at least one overlapping year i.e. a year in which there must be indices of the different bases.
In which there must be indices of the different bases.
The question of splicing arises only when a series of index numbers with an old base has been discontinued, and another fresh series of index numbers with a new base year has been constructed. Here, splicing of two, or more disjoint index series is made to have continuity of comparison by bringing them all under a common base.
For this, either the new index series is spliced with the old index series, or the old index series is spliced with the news index series. In the former case, it is called ‘forward splicing’. and in the letter case is called ‘backward splicing’. In any case, for the overlapping year concerned, a common factor is found by which all the indices of the series to be spliced are multiplied to get the spliced indices with a common base.
Determination of the Common Factor in Case of ‘Forward Splicing’
As pointed out earlier, when the new indices are to be spliced with the base year of the old indices, it is a case of foward splicing. In such a case, the common factor is to be determined by the following formula:
C = Old index of the overlapping year / 100
In case of Backward Splicing
As pointed out earlier, when the old indices are to be spliced with the base year of the new indices, it is a case of ‘backward splicing’. In such a case, the common factor is determined by the following formula.
C = 100/ Old index of the overlapping year
Like the base shifting, splicing will give accurate results, if in the construction of the index numbers fixed wrights and geometric mean have been used and the indices satisfy circular tests.