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Sep 5, 2014

Measuring Consumer Substitution with JMP®

Consumer price index formulas inherently contain assumptions about how consumers change their consumption patterns in response to price change.  A measure of this change in consumption is referred to as elasticity of substitution.  In this poster presentation I use JMP® Fit Y by X to estimate the elasticity of substitution parameter, which is a component of the Constant Elasticity of Substitution consumer price index formula.  Additionally, I use the Local Data Filter > Check Box Display option to create multi-year pooled regressions.

Joshua Klick, Economist, Bureau of Labor Statistics