Geometric MeanA geometric mean is a specialised measure used to average proportional increases. Procedure Step 1: Express the proportional increases (P pay) as a proportional multiplies (1 + P) Step 2: Calculate the geometric mean multiplier using: Geometric mean multiplier =  Step 3: Subtract 1 from the geometric mean multiplier to obtain the average proportional increase.
Example 3.11: If it is known that the price of a commodity has risen by 6%, 13%, 11% and 15% in each of four successive years, then the geometric mean rise can be calculated as follows: Step 1: The 4 proportional multipliers are 1.06, 1.13, 1.11 and 1.15 Step 2: The geometric mean is given by:  Step 3: The (geometric) average rise = 1.112 - 1 = 0.112 = 11.2%
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