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Regional price levels in Germany

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  • Michael Roos

Abstract

Cross-sectional evidence on price levels is scarce for all countries. However, several studies suggest that there might exist considerable differences in price levels within countries, which has obvious welfare implications. A sample of price levels in 50 German cities in 1993 is used to analyse the determinants of inter-city price level differentials. The most important explanatory variables for price level differentials are population size and density and the average wage level. Using this information, the price levels are predicted in all 440 German districts and aggregated to the state level. At the state level convergence of the price levels to a common mean is found, but at a very low speed. The estimated half-life is about 19 years.

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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 38 (2006)
Issue (Month): 13 ()
Pages: 1553-1566

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Handle: RePEc:taf:applec:v:38:y:2006:i:13:p:1553-1566

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Citations

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Cited by:
  1. Peter von der Lippe & Claus Breuer, 2009. "Regionale Kaufkraftvergleiche in Deutschland: Bedarf, Methoden und Machbarkeit," AStA Wirtschafts- und Sozialstatistisches Archiv, Springer, vol. 3(1), pages 25-40, June.
  2. Deckers, Thomas & Falk, Armin & Schildberg-Hörisch, Hannah, 2013. "Nominal or Real? The Impact of Regional Price Levels on Satisfaction with Life," IZA Discussion Papers 7345, Institute for the Study of Labor (IZA).
  3. Uwe Blien & Hermann Gartner & Heiko Stüber & Katja Wolf, 2009. "Regional price levels and the agglomeration wage differential in western Germany," The Annals of Regional Science, Springer, vol. 43(1), pages 71-88, March.
  4. Joachim Ragnitz, 2009. "Ostdeutschland heute: Viel erreicht, viel zu tun," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 62(18), pages 03-13, 09.
  5. Blien, Uwe & Gartner, Hermann & Stüber, Heiko & Wolf, Katja, 2007. "Expensive and low-price places to live : regional price levels and the agglomeration wage differential in Western Germany," IAB Discussion Paper 200715, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
  6. Björn Alecke & Timo Mitze & Gerhard Untiedt, 2010. "Internal migration, regional labour market dynamics and implications for German East-West disparities: results from a Panel VAR," Jahrbuch für Regionalwissenschaft, Springer, vol. 30(2), pages 159-189, September.
  7. Joachim Ragnitz, 2009. "Wirtschaftspolitische Aufgaben in Ostdeutschland," ifo Dresden berichtet, Ifo Institute for Economic Research at the University of Munich, vol. 16(05), pages 21-29, October.
  8. Ferguson, Shon, 2010. "Endogenous Product Differentiation, Market Size and Prices," Research Papers in Economics 2010:26, Stockholm University, Department of Economics.
  9. Boes, Stefan & Lipp, Markus & Winkelmann, Rainer, 2007. "Money illusion under test," Economics Letters, Elsevier, vol. 94(3), pages 332-337, March.
  10. Dominik Weiß, 2008. "Mietpreise und Lebensqualität: Ist das Wohnen in Ostdeutschland wirklich günstig?," IWH Discussion Papers 12, Halle Institute for Economic Research.
  11. Reinhold Kosfeld & Hans-Friedrich Eckey, 2010. "Market access, regional price level and wage disparities: the German case," Jahrbuch für Regionalwissenschaft, Springer, vol. 30(2), pages 105-128, September.
  12. Elissaios Papyrakis & Ohad Raveh, 2013. "An Empirical Analysis of a Regional Dutch Disease: The case of Canada," OxCarre Working Papers 106, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  13. Reinhold Kosfeld & Hans-Friedrich Eckey, 2008. "Market Access, Regional Price Level and Wage Disparities: The German Case," MAGKS Papers on Economics 200814, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  14. Ohad Raveh, 2013. "Dutch Disease, Factor Mobility, and the Alberta Effect - The case of federations," OxCarre Working Papers 100, Oxford Centre for the Analysis of Resource Rich Economies, University of Oxford.
  15. Stefan Linz, 2010. "Regional Consumer Price Differences Within Germany Information Demand, Data Supply and the Role of the Consumer Price Index," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 230(6), pages 814-831, December.

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