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New Economic Geography and Regional Price Level

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Author Info

  • Reinhold Kosfeld

    ()
    (Department of Economics, University of Kassel)

  • Hans-Friedrich Eckey

    ()
    (Department of Economics, University of Kassel)

  • Matthias Türck

    ()
    (Department of Economics, University of Kassel)

Abstract

In view of the lack of area-wide regional price data, Aten and Heston (2005) adopted an econometric approach in estimating regional price level from an international perspective. At a regional level, however, spatial economic theory may contribute to advancement in explaining price level determination. Recently, the market potential approach as an essential element of NEG models has been employed for explaining observed regional land prices (Brakman et al., 2004). The present paper relies on the price mechanisms of the Helpman model (Helpman, 1998) in developing spatial-econometric models for regional price level and its major components. By evaluating a south German sample, first evidence on the empirical significance of NEG-based price level models is provided.

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Bibliographic Info

Paper provided by University of Kassel, Institute of Economics in its series Discussion Papers in Economics with number 78/05.

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Length: 21 pages
Date of creation: Oct 2005
Date of revision:
Handle: RePEc:kas:wpaper:2005-78

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Related research

Keywords: Regional price level; Helpman model; spatial-econometric models; ESDA;

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Cited by:
  1. Laura H. Atuesta & Dusan Paredes Araya, 2012. "A spatial cost of living index for Colombia using a microeconomic approach and censored data," Applied Economics Letters, Taylor & Francis Journals, vol. 19(18), pages 1799-1805, December.

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