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Expenditure-based Interarea Cost of Living Index

Alexandru Voicu () and Michael Lahr ()

Urban/Regional from University Library of Munich, Germany

Abstract: The main difficulty in comparing the cost-of-living among metropolitan areas is that, at this level, prices of most goods and services are not available. Even when the prices are available, constructing aggregate prices for groups of goods and services comparable across areas, is a difficult task. In this paper we attempt to construct a cost-of-living index for metropolitan areas, using only data on metropolitan-level expenditures. While our method circumvents the two problems mentioned above, it requires two assumptions regarding the level of utility attained across areas, and the effect of demand elasticity on the relationship priceexpenditure.

Keywords: Index; Cost of Living; metropolitan; macrolevel data (search for similar items in EconPapers)
JEL-codes: R (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-geo and nep-ure
Date: 2004-03-25
Note: Type of Document - pdf; pages: 20
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Handle: RePEc:wpa:wuwpur:0403006