Disparities in Prices and Income Across German NUTS 3 Regions
AbstractIn EU countries, knowledge on spatial disparities in overall price level is extremely scarce. When interregional price disparities are large, however, nominal income measures fail to assess prosperity and the catch-up processes of regions. Despite its importance for regional policy, no official regional price statistic is available as a standard. On account of this gap, this paper deals with the econometric estimation of regional price indices for German NUTS 3 regions. Econometric price models for the consumer price index (CPI) and the housing rent index (HRI) are developed on the ground of utility maximization in a two-goods model. The estimated price indices are used to analyse price disparities in the period 1995-2004 across German NUTS 3 regions. Real income comparisons show that the East/West gap is likely to be substantially larger than assessed from incomplete price data in previous studies.
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Bibliographic InfoPaper provided by University of Kassel, Institute of Economics in its series Discussion Papers in Economics with number 93/07.
Length: 33 pages
Date of creation: Jun 2007
Date of revision:
Regional price level; econometric price models; price disparities; real income disparities;
Find related papers by JEL classification:
- C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
- R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies
- R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-07-07 (All new papers)
- NEP-GEO-2007-07-07 (Economic Geography)
- NEP-URE-2007-07-07 (Urban & Real Estate Economics)
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