New Price Index Method Approved

October 22, 2011
Commissioner Approves Change in Price Index Method

The Commissioner today approved BC Ferries’s proposal requesting that the existing method used to calculate the quarterly price cap index, known as the  Tornquist index, be replaced with the Direct Paasche Price Index.  This change will be consistent with the index used to calculate price cap indices and will avoid unintentionally produced price index drift due to swings in prices and quantities (or traffic) witnessed in 2010/11.  The revised methodology is retroactive to April 1, 2010 due to the four-quarter averaging used to calculate weighted average fares.

Click here for more information on the commissioner’s determination.