Disparities in Prices and Income across German NUTS 3 Regions

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract. In EU countries, knowledge on spatial disparities in overall price level is extremely scarce. When interregional price disparities are large, however, nominal income measures fail to assess prosperity and the catch-up processes of regions. Despite its importance for regional policy, no official regional price statistic is available as a standard. On account of this gap, this paper deals with the econometric estimation of regional price indices for German NUTS 3 regions. Econometric price models for the consumer price index (CPI) and the housing rent index (HRI) are developed on the ground of utility maximization in a two-goods model. The estimated price indices are used to analyse price disparities in the period 1995-2004 across German NUTS 3 regions. Real income comparisons show that the East/West gap is likely to be substantially larger than assessed from incomplete price data in previous studies. Terms of use: Documents in

Market access, regional price level and wage disparities: the German case

“…In particular the growth pole concept has experienced a revival in EU regional policy. Economic growth effects may be larger by investment in growth poles than by supporting solely rural depressed regions (Eckey et al, 2008).…”

“…Brakman et al (2004) face this problem by additionally using a "simplified price index" of manufactures that is directly derived from regional wages. Studies on determinants of regional price level, however, show that the wage rate is only one among other price determinants (Roos, 2006;Kosfeld et al, 2008). In order to capture the forces shaping the economic landscape according to NEG theory, the used concept of the market potential should involve at least some estimates of regional price levels.…”

“…Instead, we adopt the price index approach suggested by Brakman et al (2004) in order to capture the geography of market access more adequately. Because of the lack of official data, the price level series constructed by Kosfeld et al (2008) is used to proxy the price index of manufactures. Econometric results of this approach are compared with those of the simple market potential approach and the housing rent approach.…”

“…We use the consumer price index without housing (CPI-H) as a proxy for the price index of differentiated goods. The index is estimated for all German districts in an econometric study of Kosfeld et al (2008). Data on housing rents (HRI) at the district level are provided by the Federal Office for Building and Regional Planning (BBR).…”

The importance of spatial autocorrelation for regional employment growth in Germany

“…gross value added per employee), inhabitants, plants and area of the regions are depicted from the Statistische Ämter des Bundes und der Länder. 2 Furthermore, the regional price index of Kosfeld et al (2008) is applied to deflate nominal variables at regional level. The variables are measured at the level of labor market regions, given by Eckey et al (2006), in order not to cut existing labor markets by using NUTS3-regions.…”