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Using a panel of51 prices from 48 cities in the United Stateswe provide an upper bound estimate of the rate of convergence to Purchasing Power Parity. We find convergence rates substantially higher than typically found in crosscountry data. We investigate some potentially seriousbiases induced by i.i.d. measurementerrors in the data, and find our estimatesto be robust to these potential biases. We also presentevidence thatconvergence occurs faster for largerprice differences. Finally,we find thatratesof convergence are slower for cities fartherapart. However, our estimates suggest thatdistance alone can only account for a small portion of the much slower convergence rates across nationalborders.

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