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Regional Price Parities and Real Regional Income for the United States

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  • Bettina H. Aten

    (Bureau of Economic Analysis, Department of Commerce)

Abstract

The success and expansion of the International Comparison Program (ICP) has led to an increase in interest and effort on the estimation of sub-national price levels and purchasing power parities (PPPs). The ICP highlighted a difficulty that large countries such as Brazil, Russia, India and China face during the price-collection phase, namely how to obtain average prices when there are large disparities in many types of expenditure categories, such as housing prices between rural and urban settings. The fact that such disparities were in evidence led to more research on within-country PPPs, or regional price parities (RPPs). The difference between a RPP and the PPPs is simply that the former are in the same currency, while PPPs are usually converted to a reference country or currency by the exchange rate, such as the United States Dollar or the Euro. This paper describes the methodology used to estimate the RPPs within the United States, and shows their effect on measures of income adjusted to constant dollars, termed real regional incomes.

Suggested Citation

  • Bettina H. Aten, 2017. "Regional Price Parities and Real Regional Income for the United States," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 131(1), pages 123-143, March.
    • Handle: RePEc:spr:soinre:v:131:y:2017:i:1:d:10.1007_s11205-015-1216-y
    DOI: 10.1007/s11205-015-1216-y
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    3. Petr Jansk & Marek ediv, 2018. "How Do Regional Price Levels Affect Income Inequality? Household-level Evidence From 21 Countries," LIS Working papers 752, LIS Cross-National Data Center in Luxembourg.
    4. Laureti Tiziana & Polidoro Federico, 2022. "Using Scanner Data for Computing Consumer Spatial Price Indexes at Regional Level: An Empirical Application for Grocery Products in Italy," Journal of Official Statistics, Sciendo, vol. 38(1), pages 23-56, March.
    5. von Auer, Ludwig & Weinand, Sebastian, 2022. "A nonlinear generalization of the country-product-dummy method," Discussion Papers 45/2022, Deutsche Bundesbank.
    6. Geloso, Vincent & Msaid, Youcef, 2018. "Adjusting Inequalities for Regional Price Parities: Importance and Implications," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 48(4), February.
    7. K. P. Gluschenko, 2022. "Costs of Living and Real Incomes in the Russian Regions," Regional Research of Russia, Springer, vol. 12(3), pages 365-377, September.
    8. Chen,Xiaomeng & Mungai,Rose & Nakamura,Shohei & Pearson,Thomas Patrick & Wambile,Ayago Esmubancha & Yoshida,Nobuo, 2020. "How Useful is CPI Price Data for Spatial Price Adjustment in Poverty Measurement? : A Case from Ghana," Policy Research Working Paper Series 9388, The World Bank.
    9. Alicia Gómez-Tello & Alfonso Díez-Minguela & Julio Martinez-Galarraga & Daniel A. Tirado, 2019. "Regional prices in early twentieth-century Spain: a country-product-dummy approach," Cliometrica, Springer;Cliometric Society (Association Francaise de Cliométrie), vol. 13(2), pages 245-276, May.
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