Expenditure-based Interarea Cost of Living Index
AbstractThe main difficulty in comparing the cost-of-living among metropolitan areas is that, at this level, prices of most goods and services are not available. Even when the prices are available, constructing aggregate prices for groups of goods and services comparable across areas, is a difficult task. In this paper we attempt to construct a cost-of-living index for metropolitan areas, using only data on metropolitan-level expenditures. While our method circumvents the two problems mentioned above, it requires two assumptions regarding the level of utility attained across areas, and the effect of demand elasticity on the relationship priceï‚¾expenditure.
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Bibliographic InfoPaper provided by EconWPA in its series Urban/Regional with number 0403006.
Length: 20 pages
Date of creation: 25 Mar 2004
Date of revision:
Note: Type of Document - pdf; pages: 20
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Index; Cost of Living; metropolitan; macrolevel data;
Find related papers by JEL classification:
- R - Urban, Rural, Regional, Real Estate, and Transportation Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-03-28 (All new papers)
- NEP-GEO-2004-03-28 (Economic Geography)
- NEP-URE-2004-03-28 (Urban & Real Estate Economics)
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- Katharine G. Abraham & John S. Greenlees & Brent R. Moulton, 1998. "Working to Improve the Consumer Price Index," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 27-36, Winter.
- Braithwait, Steven D, 1980. "The Substitution Bias of the Laspeyres Price Index: An Analysis Using Estimated Cost-of-Living Indexes," American Economic Review, American Economic Association, vol. 70(1), pages 64-77, March.
- Angus Deaton, 1998. "Getting Prices Right: What Should Be Done?," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 37-46, Winter.
- W. Erwin Diewert, 1998. "Index Number Issues in the Consumer Price Index," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 47-58, Winter.
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