 Factor Model Based Regional IndicesTibor Szendrei (), Arnab Bhattacharjee (), Adrian Pabst () and Eliza da Silva Gomes () No 578, National Institute of Economic and Social Research (NIESR) Discussion Papers from National Institute of Economic and Social Research Abstract: This paper introduces a novel approach to constructing multi‐dimensional regional growth and development indices using dynamic factor models designed for big data contexts. Focusing on the UK's regional variations in pay, employment, and productivity, the model integrates spatial and temporal dynamics, allowing for more precise analysis of regional inequalities. By employing structural dynamic factor models, the proposed methodology not only tracks regional progress but also links policy‐driven interventions to economic outcomes. Applied to the UK's 'Levelling Up' agenda, the indices highlight significant disparities, with regions like North Eastern Scotland showing marked improvements, while others, such as Inner London‐West, face stagnation. This study offers a powerful tool for policymakers to measure and understand the drivers of regional growth, providing actionable insights for addressing persistent economic inequalities. Keywords: Dynamic Factor Models; Spatial Econometrics; UK Levelling up (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:nsr:niesrd:578 Access Statistics for this paper More papers in National Institute of Economic and Social Research (NIESR) Discussion Papers from National Institute of Economic and Social Research 2 Dean Trench Street Smith Square London SW1P 3HE. Contact information at EDIRC. |
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