Ceteris paribus means “other things being equal.” In economics, it describes an assumption: hold other relevant factors constant to examine how a change in one variable relates to another. It simplifies a comparison; it does not claim that real-world conditions stay fixed.
What does ceteris paribus mean?
The Latin phrase ceteris paribus is commonly translated as “other things being equal” or “all else constant.” Economists use it to focus an explanation or model on a particular relationship while setting aside other influences for the purpose of that analysis. OpenStax defines the phrase in its discussion of shifts in demand and supply; Boston University’s Economics in Context Initiative also explains it as a simplifying assumption in economic analysis (Chapter 2: Foundations of Economic Analysis, 2024).
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Which things are held constant depends on the specific claim. The phrase alone does not identify them, so a careful explanation names the relationship being studied and the relevant background factors assumed not to change. The University of Warwick’s guide to Latin phrases in economics likewise treats the meaning in context.
How does ceteris paribus work in a demand example?
A demand curve shows the relationship between a good’s price and the quantity consumers are willing to buy. To examine how quantity demanded responds to that good’s own price, economists assume other relevant determinants of demand remain unchanged. These can include consumers’ income and preferences, population, and prices of related goods. OpenStax explains this assumption in its account of demand and supply shifts.
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When only the good’s price changes
If the good’s own price changes while the other demand determinants are held constant, the model describes a movement along the demand curve. The comparison isolates the relationship between price and quantity demanded under those conditions.
When another determinant changes
If income, preferences, or the price of a related good changes, the original comparison no longer isolates the good’s own price. A change in one of these other determinants can shift the demand curve itself. In practice, several conditions may change at once; ceteris paribus makes it possible to examine one relationship without treating the model as a complete description of every change in the economy.
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How to read a ceteris paribus claim
- Identify the two variables whose relationship is being described.
- Ask which other relevant factors the analysis assumes will stay constant.
- Check whether the claim is conditional on those assumptions or is being presented as an unconditional prediction.
For example, “a higher price reduces quantity demanded, ceteris paribus” is a conditional statement. To apply it, ask whether other determinants of demand—such as income or the prices of related goods—are being treated as unchanged. If not, the observed outcome may reflect more than the price change.
Independent reader supportYour contribution helps us test, update, and keep practical guides available for everyone.What the assumption does—and does not—say
Ceteris paribus helps make a complicated question manageable by isolating selected variables. It does not mean that every circumstance is literally fixed, that the assumption holds indefinitely, or that real economies change in only one way. Its usefulness depends on making clear what is being compared and which influences are set aside. For a formal discussion of ceteris paribus laws, see the Spring 2020 edition of the Stanford Encyclopedia of Philosophy entry.
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