Department of Labor Logo United States Department of Labor
Dot gov

The .gov means it's official.
Federal government websites often end in .gov or .mil. Before sharing sensitive information, make sure you're on a federal government site.

Https

The site is secure.
The https:// ensures that you are connecting to the official website and that any information you provide is encrypted and transmitted securely.

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

Improving the Preliminary Values of the Chained CPI‐U

John S. Greenlees

Abstract

This paper employs a constant-elasticity of substitution (CES) index formula to improve the accuracy of the preliminary values of the Chained Consumer Price Index for All Urban Consumers (C-CPI-U). Using the CES behavioral model, I present estimates of the overall extent of consumer response to relative price changes exhibited in Consumer Expenditure Survey data for 1999-2008. The associated parameter estimates are then used to develop CES forecasts of the final C-CPI-U index values. Simulations demonstrate that use of the CES approach over the last several years would have resulted in smaller index revisions between the preliminary and final C-CPI-U releases. Looking to the future, CES-based preliminary estimates could increase the usefulness of the C-CPI-U to government programs and other users