Anatomy of regional price differentials: evidence from micro-price data. Issue 4 (1st October 2020)

• Record Type: Journal Article
• Authors: Weinand, Sebastian; von Auer, Ludwig
• Is Part Of: Spatial economic analysis. Volume 15:Issue 4(2020)
• Page Start: 413
• Page End: 440
• Publication Date: 2020-10-01
• Subjects: spatial price comparison -- regional price index -- purchasing power parity (PPP) -- country-product-dummy (CPD) method -- hedonic regression -- consumer price data; C21 -- C43 -- E31 -- O18 -- R10; Space in economics -- Periodicals; Economic geography -- Periodicals; Space in economics -- Econometric models -- Periodicals; Urbanization -- Periodicals; Espace (Économie politique) -- Périodiques; Économétrie -- Périodiques; Géographie économique -- Périodiques; Économie industrielle -- Périodiques; Économie du travail -- Périodiques; Économie urbaine -- Périodiques; Politique économique -- Périodiques; Relations économiques internationales -- Périodiques; 330.9
• DOI: 10.1080/17421772.2020.1729998
• Languages: English
• ISSNs: 1742-1772

Abstract

ABSTRACT: Micro-price data collected from Germany's consumer price index are used to compile a highly disaggregated regional price index for the 402 counties and cities of Germany. A multistage version of the weighted country-product-dummy (CPD) method is introduced. The unique quality of the price data allows one to depart from previous spatial price comparisons and to compare only exactly identical products. It is found that the price levels are spatially autocorrelated and largely driven by the cost of housing. The price level in the most expensive region is about 27% higher than in the cheapest region.