Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/32132
Authors: 
Kosfeld, Reinhold
Eckey, Hans-Friedrich
Lauridsen, Jørgen
Year of Publication: 
2007
Series/Report no.: 
Volkswirtschaftliche Diskussionsbeiträge 93
Abstract: 
In EU countries, knowledge on spatial disparities in overall price level is extremely scarce. When interregional price disparities are large, however, nominal income measures fail to assess prosperity and the catch-up processes of regions. Despite its importance for regional policy, no official regional price statistic is available as a standard. On account of this gap, this paper deals with the econometric estimation of regional price indices for German NUTS 3 regions. Econometric price models for the consumer price index (CPI) and the housing rent index (HRI) are developed on the ground of utility maximization in a two-goods model. The estimated price indices are used to analyse price disparities in the period 1995-2004 across German NUTS 3 regions. Real income comparisons show that the East/West gap is likely to be substantially larger than assessed from incomplete price data in previous studies.
Subjects: 
Regional price level
econometric price models
price disparities
real income disparities
JEL: 
C21
R13
R31
Document Type: 
Working Paper

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