Answer:
The correct answer is: overstate
Explanation:
The substitution bias in economic index numbers appears when the possibility of a consumer to change the consumption of a good - that has become more expensive relative to others - for a cheaper one, is ignored. Thus, looking at the CPI (Consumer Price Index), as an indicator of how much the consumer cost of living has raised over time, without eliminating the substitution bias, can over-estimate this inflation effect.
