New study reveals significant price disparities across U.S. states and cities.
Price parities were estimated across the U.S. in 2005 to adjust for differences in price levels between regions. The researchers used data from the Consumer Price Index and the American Community Survey to calculate these regional price parities. By applying a Bayesian spatial smoothing method, they determined individual county price levels and aggregated them to create regional price parities for 363 metropolitan areas and 51 states. This approach helps compare Personal Income and Gross Domestic Product estimates accurately by considering regional price differences.
