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REGIONAL PRICE PARITIES (RPPs) are spatial price indexes that measure price level differences across regions for one time period. In this article, we present three sets of experimental estimates of RPPs for 2006-2010: (1) for the 50 states and the District of Columbia, (2) for the metropolitan and nonmetropolitan portions of the states, and (3) for 366 metropolitan areas and the combined nonmetropolitan portion of the United States. Based on ongoing research at the Bureau of Economic Analysis (BEA), these RPPs combine data from the Bureau of Labor Statistics (BLS) Consumer Price Index (CPI) program and Consumer Expenditure Survey with data from the Census Bureau's 5-year American Community Survey (ACS) to produce detailed estimates of price level differences across regions and across expenditure classes.
RPPs compare the average price level of an area (such as a state or metropolitan area) with the national average price level for all areas. The national average price level is set at 100, so an area's price level is expressed as a percentage of the national average; for example, the price level of all goods and services in the state of New York is 14.1 percent higher than the national average (114.1/100) (table 1). The price levels of two states can also be compared by examining their RPP ratio; for example, the price level of New York is 2.4 percent higher than that of New Jersey (114.1/ 111.5).
In previous research at BEA, annual RPPs were estimated for 38 urban and metropolitan areas that are based on BLS definitions and that represent roughly 87 percent of the U.S. population (Aten 2005, 2006).1 Estimates by states and metropolitan statistical areas were published in 2008 using the ACS annual series for counties with more than 65,000 people (Aten and D'Souza 2008). In 2011, BEA published RPPs for 2005-2009 using price data on rents for all counties from the ACS and rural expenditure weights from BLS (Aten, Figueroa, and Martin 2011a, 2011b). The 2006-2010 RPPs incorporate county-level price and expenditure data on rents from the ACS as well as a set of weights based on BEA's personal consumption expenditure data. In the summer of 2013, updated prototype versions of the RPPs will be published.
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States. The RPPs for all items and...