Econometric measurement of regional price levels on the basis of localized survey data

Abstract

"Although disparities in cost of living across space play a crucial role in regional economics and policy, comparable disaggregated regional price levels are not available for either Germany or for other EU countries. In measuring spatial disparities in standard of living, Aten and Heston (2005) estimate regional price levels using spatial-econometric models calibrated with national consumer price indices. Their demand-orientated approach disregards regional effects of explanatory variables. Our study takes up the econometric approach and extends present research in different respects. The price and income comparisons are based on econometric regional price models for the consumer price index without housing (CPI-H) and the housing rent index (HRI). They are derived from utility maximization of consumers in a two-goods model. The CPI model without housing is calibrated using data on the latest price comparison of 50 selected German cities in 1993 (Ströhl 1994). Data on housing rents are available for all 439 German districts at the current fringe of the sample period from the Federal Office for Building and Regional Planning (BBR). Estimates for CPI without housing, housing rents and overall price level at the NUTS 3 level for the period 1995 - 2004 are obtained from numerical specified econometric price models." (Authors' abstract, IAB-Doku) ((en))

Cite article

Kosfeld, R., Eckey, H. & Schüßler, M. (2010): Ökonometrische Messung regionaler Preisniveaus auf der Basis örtlich beschränkter Erhebungen. In: J. Möller, E. Hohmann & D. Huschka (Hrsg.) (2010): Der weiße Fleck - zur Konzeption und Machbarkeit regionaler Preisindizes (IAB-Bibliothek, 324), p. 91-124.