Do regions matter for the behavior of city relative prices in the U. S.?
In this paper, we examine the importance of regions in the behavior of city level relative prices in the United States. The results indicate that average relative price variability is significantly lower if the city pairs associated with a relative price series belong to the same region. However, after controlling for the effect of distance, relative price variability (measured by standard deviation of relative prices) increases significantly if both cities are in the West and relative price variability (measured by standard deviation of relative price changes) decreases if they both are in the Northeast. Further, relative price variability increases significantly if at least one city is located either in the South or in the West. We find that the likelihood of relative price convergence increases if both cities belong to the South and this result is robust irrespective of whether we control for distance or not. It, however, decreases if at least one city belongs to the West. Finally, distance appears to increase relative price variability and to lower the likelihood of relative price convergence if at least one city is located in the South.
|Date of creation:||Oct 2008|
|Date of revision:|
|Contact details of provider:|| Postal: P O Box 2118, Huntsville, TX 77341-2118|
Web page: http://www.shsu.edu/~eco_www/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Charles Engel & John H. Rogers, 1994.
"How Wide is the Border?,"
NBER Working Papers
4829, National Bureau of Economic Research, Inc.
- Charles Engel & John H. Rogers, 1995. "How wide is the border?," International Finance Discussion Papers 498, Board of Governors of the Federal Reserve System (U.S.).
- Engel, C. & Rogers, J.H., 1995. "How Wide is the Border?," Papers 4-95-16, Pennsylvania State - Department of Economics.
- Charles Engel & John H. Rogers, 1995. "How wide is the border?," Research Working Paper 95-09, Federal Reserve Bank of Kansas City.
- David C. Parsley & Shang-Jin Wei, 1996.
"Convergence to the Law of One Price Without Trade Barriers or Currency Fluctuations,"
The Quarterly Journal of Economics,
Oxford University Press, vol. 111(4), pages 1211-1236.
- David C. Parsley & Shang-Jin Wei, 1996. "Convergence to the Law of One Price Without Trade Barriers or Currency Fluctuations," NBER Working Papers 5654, National Bureau of Economic Research, Inc.
- Chen, L. L. & Devereux, J., 2003. "What can US city price data tell us about purchasing power parity?," Journal of International Money and Finance, Elsevier, vol. 22(2), pages 213-222, April.
- Stephen G. Cecchetti & Nelson C. Mark & Robert J. Sonora, 2002. "Price Index Convergence Among United States Cities," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 43(4), pages 1081-1099, November.
When requesting a correction, please mention this item's handle: RePEc:shs:wpaper:0803. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Christian Raschke)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.