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Bureau of Labor Statistics > Office of Survey Methods and Research > Publications > Browse Research Papers

A Comparison of the Substitution Effect for Input and Output Price Indexes

Keith A. Waehrer

Abstract

The substitution effect is different for output and input indexes like the consumer price index and the producer price index respectively. The conceptual index for both output and input indexes are defined and compared. Then the conceptual indexes are compared with some common index number formulas. Some results relating to which formulas are closer to the conceptual index are reviewed.