Estimates of State and Metropolitan Price Levels for Consumption Goods and Services in the United States, 2005

摘要

Price deflators are commonly used in time-to-time economic series to adjust for changes in price levels across years. This paper estimates spatial price deflators that may be used for adjusting price level differences across geographic areas. The work is based on micro-level price data from the Consumer Price Index of the Bureau of Labor Statistics and the American Community Survey of the Census Bureau. It uses a Bayesian two-stage spatial smoothing approach to estimate Spatial Price Indexes (SPIs) for 363 metropolitan areas and 51 states in the United States. An example of the relevance of SPIs is given by adjusting the Personal Income and Gross Domestic Product estimates by state and metropolitan area produced by the Bureau of Economic Analysis for the year 2005, and comparing the results to the nominal (non-adjusted) values.