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A cost of living index for Spanish cities

Author

Listed:
  • Victor Forte-Campos
  • Enrique Moral-Benito
  • Javier Quintana

Abstract

Citizens’ well-being depends both on their income levels and on the cost of living in their specific place of residence. However, very limited data are available on differences in price levels across geographical areas within a single country. This article presents a price index for Spanish urban areas covering the period 2004-2020. By way of example, according to this index, the cost of living in the two largest cities (Madrid and Barcelona) in 2020 was nearly 20% higher than the average of other Spanish urban areas. Thus, while average private sector wages in Madrid and Barcelona were 45% higher than in other cities, this gap narrows to 21% when wages are adjusted to reflect purchasing power.

Suggested Citation

  • Victor Forte-Campos & Enrique Moral-Benito & Javier Quintana, 2021. "A cost of living index for Spanish cities," Economic Bulletin, Banco de España, issue 3/2021.
    • Handle: RePEc:bde:journl:y:2021:i:03:d:aa:n:29
    Note: Analytical Articles
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    File URL: https://www.bde.es/f/webbde/SES/Secciones/Publicaciones/InformesBoletinesRevistas/ArticulosAnaliticos/21/T3/Files/be2103-art29e.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    cost of living; local prices; purchasing power; urban areas.;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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