Regional price levels in Germany

Michael Roos ()

ERSA conference papers from European Regional Science Association

Abstract: Cross-sectional evidence on price levels is scarce in all countries. However, several studies suggest that considerable differences in price levels within countries exist, which has obvious welfare implications. I use a sample of price levels in 50 German cities in 1993 to analyze the determinants of inter-city price level differentials. The most important factors driving price level differentials are population size and the average wage level. Using this information, I predict the price levels in all 440 German districts and aggregate them to the state level. On the state level I find convergence of the price levels to a common mean, but at a very low speed. The estimated half-life is about 15 years.

Date: 2003-08
New Economics Papers: this item is included in nep-geo and nep-ure
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Regional price levels in Germany (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:wiw:wiwrsa:ersa03p511

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