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Detecting intra-national PPP model in China: A median-unbiased estimation approach

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  • Woo, Kai-Yin
  • Lee, Shu-Kam

Abstract

This paper studies the speed of price adjustments toward the intra-national PPP level within China based on half-life measurement. We calculate the point estimates of half-lives and the corresponding confidence intervals using median-unbiased estimation methods to correct for downward bias in least squares estimates. The point estimates of half-lives indicate that the speed of mean reversion toward convergence between region pairs is fast. A strong conclusion about the high speed of adjustments is, however, unwarranted in some regions where the confidence intervals for half-life estimates are much wider than others.

Suggested Citation

  • Woo, Kai-Yin & Lee, Shu-Kam, 2009. "Detecting intra-national PPP model in China: A median-unbiased estimation approach," Economic Modelling, Elsevier, vol. 26(5), pages 1029-1032, September.
    • Handle: RePEc:eee:ecmode:v:26:y:2009:i:5:p:1029-1032
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    2. Lee, Chin, 2015. "Is There Any Regional Price Disparity in Peninsular Malaysia?," MPRA Paper 70592, University Library of Munich, Germany.

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