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