Notes on Estimating the Multi-Year Regional Price Parities by 16 Expenditure Categories: 2005-2009

摘要

Price indexes are commonly used to measure price level differences between one time period and the next, such as the Consumer Price Index (CPI) published by the Bureau of Labor Statistics (BLS). The percent change in the CPI is a measure inflation (or deflation). Less common are price indexes that measure price level differences between one place and another. This is in part because the methodology and sampling requirements for the two measures have important differences. Fortunately, advances in regional analysis and in the techniques used in estimating time-to-time indexes, such as hedonic regressions, are applicable to the estimation of place-to-place indexes. This article describes an update to the method developed by the BEA to estimate such place-to-place indexes that measure regional price level differences. Percent differences in regional price levels are called regional price parities (RPPs). The main difference between a temporal index and the price parities described here is that the former measures changes in price levels across different time periods for one specific place, while the latter captures differences in price levels across various places for one specific time period.