Spatial price differences within large countries
AbstractNational and international statistical systems are strangely reticent on differences in price levels within countries. Nations as diverse as India and the United States publish inflation rates for different areas, but provide nothing that allows comparisons of price levels across places at a moment of time. The International Comparison Project, which at each round collects prices and calculates price indexes for most of the countries of the world, publishes nothing on within country differences, and in some important cases including China, Brazil, and India, rural prices are either not collected or are underrepresented, which potentially distorts the comparison between large and small countries, Deaton and Heston (2010). Yet spatial price indexes are required if we are to compare real incomes across areas, and both national and global poverty estimates require intra- as well as inter-national price indexes. There are also good grounds for suspecting that price levels differ across regions. Several large Indian states are larger than most countries, and consumption patterns are sharply different across the subcontinent. And for the same reasons that we expect price levels to be lower in poorer countries the Balassa-Samuelson theorem we would expect prices to be lower in poorer areas within countries, at least if people are not completely mobile across space.
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Bibliographic InfoPaper provided by Princeton University, Woodrow Wilson School of Public and International Affairs, Research Program in Development Studies. in its series Working Papers with number 1321.
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prices; consumption; inflation; access; comparisons; rural; urban;
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- E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General
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- Holger Breinlich & Gianmarco I. P. Ottaviano & Jonathan R. W. Temple, 2013.
"Regional growth and regional decline,"
LSE Research Online Documents on Economics
51575, London School of Economics and Political Science, LSE Library.
- Holger Breinlich & Gianmarco I. P. Ottaviano & Jonathan R. W. Temple, 2013. "Regional Growth and Regional Decline," CEP Discussion Papers dp1232, Centre for Economic Performance, LSE.
- Breinlich, Holger & Ottaviano, Gianmarco & Temple, Jonathan, 2013. "Regional Growth and Regional Decline," CEPR Discussion Papers 9568, C.E.P.R. Discussion Papers.
- Holger Breinlich & Gianmarco I.P. Ottaviano & Jonathan R.W. Temple, 2013. "Regional growth and regional decline," Economics Discussion Papers 729, University of Essex, Department of Economics.
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