IDEAS home Printed from https://ideas.repec.org/a/rre/publsh/v27y1996i1p99-113.html
   My bibliography  Save this article

Price Differentials And Trends In State Income Levels: A Research Note

Author

Listed:
  • Steven C. Deller

    (University of Wisconsin-Madison)

  • Martin Shields

    (University of Wisconsin-Madison)

  • David Tomberlin

    (University of Wisconsin-Madison)

Abstract

Most of the discussion of regional income convergence in recent decades has operated under the assumption, either explicit or implicit, that spatial and temporal differences in regional prices (i.e., cost of living and inflation) are negligible. Using five different measures of interstate and interregional income inequality, we examine the evolution of regional income patterns before and after adjusting for price differences. Our results suggest that the common practice of overlooking interspatial differences in cost-of-living and inflation may yield a false understanding of regional income trends and, in tum, false policy prescriptions. Specifically, the pattern of regional income convergence through the 1970s followed by divergence in the 1980s are lost if spatial and temporal differences in regional prices are considered.

Suggested Citation

  • Steven C. Deller & Martin Shields & David Tomberlin, 1996. "Price Differentials And Trends In State Income Levels: A Research Note," The Review of Regional Studies, Southern Regional Science Association, vol. 26(1), pages 99-113, Summer.
    • Handle: RePEc:rre:publsh:v:27:y:1996:i:1:p:99-113
    as

    Download full text from publisher

    File URL: http://journal.srsa.org/ojs/index.php/RRS/article/view/26.1.7/pdf
    File Function: To View On Journal Page
    Download Restriction: no
    File URL: http://journal.srsa.org/ojs/index.php/RRS/article/download/26.1.7/423
    File Function: To Download Article
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Amos, Orley Jr., 1988. "Unbalanced regional growth and regional income inequality in the latter stages of development," Regional Science and Urban Economics, Elsevier, vol. 18(4), pages 549-566, November.
    2. Cletus C. Coughlin & Thomas B. Mandelbaum, 1988. "Why have state per capita incomes diverged recently?," Review, Federal Reserve Bank of St. Louis, issue Sep, pages 24-36.
    3. Cletus C. Coughlin & Thomas B. Mandelbaum, 1989. "Have federal spending and taxation contributed to the divergence of state per capita incomes in the 1980s?," Review, Federal Reserve Bank of St. Louis, issue Jul, pages 29-42.
    4. Bishop, John A & Formby, John P & Thistle, Paul D, 1994. "Convergence and Divergence of Regional Income Distributions and Welfare," The Review of Economics and Statistics, MIT Press, vol. 76(2), pages 228-235, May.
    5. Orley M. Amos, Jr., 1989. "An Inquiry into the Causes of Increasing Regional Income Inequality in The United States," The Review of Regional Studies, Southern Regional Science Association, vol. 19(2), pages 1-12, Spring.
    6. Richard J. Cebula, 1989. "The Analysis of Geographic Living-Cost Differentials: A Brief Empirical Note," Land Economics, University of Wisconsin Press, vol. 65(1), pages 64-67.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. repec:wvu:wpaper:06-12 is not listed on IDEAS
    2. George Hammond, 2004. "Metropolitan/non-metropolitan divergence: A spatial Markov chain approach," Economics of Governance, Springer, vol. 83(3), pages 543-563, July.
    3. Petr Janský & Dominika Kolcunová, 2017. "Regional differences in price levels across the European Union and their implications for its regional policy," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 58(3), pages 641-660, May.
    4. George W. Hammond & Eric C. Thompson, 2008. "Determinants of Income Growth in Metropolitan and Nonmetropolitan Labor Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(3), pages 783-793.
    5. Tatiane Almeida de Menezes & Carlos Roberto Azzoni, 2001. "Estimação de uma Estrutura de Ponderação para as Cidades Brasileiras," Anais do XXIX Encontro Nacional de Economia [Proceedings of the 29th Brazilian Economics Meeting] 078, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    6. Duffy, Neal E., 2001. "The Regional Growth of Manufacturing: Markets, Wages, and Labor Composition," The Review of Regional Studies, Southern Regional Science Association, vol. 31(3), pages 255-276, Winter.
    7. Christina Christou & Juncal Cunado & Rangan Gupta, 2019. "Price Convergence Patterns across U.S. States," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 66(2), pages 187-201.
    8. George Hammond & Eric Thompson, 2002. "Mobility and Modality Trends in US State Personal Income," Regional Studies, Taylor & Francis Journals, vol. 36(4), pages 375-387.
    9. George W. Hammond & Eric Thompson, 2006. "Convergence and Mobility: Personal Income Trends in U.S. Metropolitan and Nonmetropolitan Regions," International Regional Science Review, , vol. 29(1), pages 35-63, January.
    10. Wojan, Timothy R. & Maung, Adam C., 1998. "The Debate Over State-Level Inequality:Transparent Method, Rules of Evidence, and Empirical Power," The Review of Regional Studies, Southern Regional Science Association, vol. 28(1), pages 63-80, Summer.
    11. Mohamed Abdel-Ghany & Stephen Thoma, 2002. "Distribution of Household Income in America: Effects of Source of Income, Inflation, and Cost of Living Differentials," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 60(1), pages 281-297, December.
    12. Rokicki, Bartlomiej & Blien, Uwe & Hewings, Geoffrey J.D. & thi Hong Van, Phan, 2021. "Is there a wage curve with regional real wages? An analysis for the US and Poland," Economic Modelling, Elsevier, vol. 102(C).
    13. James A. Kurre, 2003. "Is The Cost Of Living Less In Rural Areas?," International Regional Science Review, , vol. 26(1), pages 86-116, January.
    14. Michael Beenstock & Daniel Felsenstein, 2007. "Mobility and Mean Reversion in the Dynamics of Regional Inequality," International Regional Science Review, , vol. 30(4), pages 335-361, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ward, William A. & Hite, James C., 1999. "Asset Fixity, Asset Specificity And Regional Economic Change: Hypothesis And Implications," Working Papers 18807, Clemson University, Department of Agricultural and Applied Economics.
    2. Sergio Rey & Brett Montouri, 1999. "US Regional Income Convergence: A Spatial Econometric Perspective," Regional Studies, Taylor & Francis Journals, vol. 33(2), pages 143-156.
    3. Rey, Sergio, 2015. "Bells in Space: The Spatial Dynamics of US Interpersonal and Interregional Income Inequality," MPRA Paper 69482, University Library of Munich, Germany.
    4. Alexandra SCHAFFAR, 2008. "Regional Income Inequality And Urbanisation Trends In China: 1978-2005," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 28, pages 87-110.
    5. Wan, Jun & Baylis, Kathy & Mulder, Peter, 2015. "Trade-facilitated technology spillovers in energy productivity convergence processes across EU countries," Energy Economics, Elsevier, vol. 48(C), pages 253-264.
    6. William Levernier & Dan S. Rickman & Mark D. Partridge, 1995. "Variation in U.S. State Income Inequality: 1960-1990," International Regional Science Review, , vol. 18(3), pages 355-378, July.
    7. Elias G. Carayannis & Rajiv Mallick, 1996. "Regional Income Disparities In Canada: Implications For Theories Of Regional Convergence," The Review of Regional Studies, Southern Regional Science Association, vol. 26(1), pages 55-74, Summer.
    8. James A. Kurre, 2003. "Is The Cost Of Living Less In Rural Areas?," International Regional Science Review, , vol. 26(1), pages 86-116, January.
    9. Rowley, Thomas D. & Redman, John M., 1991. "The Rapid Rise in State Per Capita Income Inequality in the 1980's: Sources and Prospects," Staff Reports 278367, United States Department of Agriculture, Economic Research Service.
    10. Fanti, Lucrezia & Pereira, Marcelo C. & Virgillito, Maria Enrica, 2023. "The North-South divide: Sources of divergence, policies for convergence," Journal of Policy Modeling, Elsevier, vol. 45(2), pages 405-429.
    11. Fousekis, Panos, 2007. "Convergence of Relative State-level Per Capita Incomes in the United States Revisited," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 37(2), pages 1-10.
    12. Panagiotis Artelaris, 2021. "Regional economic growth and inequality in Greece," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(1), pages 141-158, February.
    13. Richard J. Cebula, 2019. "Labor market freedom and geographic differentials in the percentage unemployment rate in the U.S," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 43(4), pages 828-840, October.
    14. Michel DIMOU, 2008. "Urbanisation, Agglomeration Effects And Regional Inequality : An Introduction," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 27, pages 7-12.
    15. Connaughton, John E. & Swartz, Caroline, 2015. "Changes in State PCPI Rankings," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 45(1).
    16. Shin, Inyong, 2012. "Income inequality and economic growth," Economic Modelling, Elsevier, vol. 29(5), pages 2049-2057.
    17. Mark V. JANIKAS & Sergio J. REY, 2008. "On The Relationships Between Spatial Clustering, Inequality, And Economic Growth In The United States : 1969-2000," Region et Developpement, Region et Developpement, LEAD, Universite du Sud - Toulon Var, vol. 27, pages 13-34.
    18. David Brasington & Mika Kato & Willi Semmler, 2010. "Transitioning Out Of Poverty," Metroeconomica, Wiley Blackwell, vol. 61(1), pages 68-95, February.
    19. Euijune Kim & Yasir Niti Samudro, 2017. "The impact of intergovernmental transfer funds on interregional income disparity in Indonesia," International Journal of Urban Sciences, Taylor & Francis Journals, vol. 21(1), pages 22-40, January.
    20. Krishna Mazumdar, 2000. "Inter-Country Inequiality in Social Indicators of Development," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 49(3), pages 335-345, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:rre:publsh:v:27:y:1996:i:1:p:99-113. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tammy Leonard & Lei Zhang (email available below). General contact details of provider: http://www.srsa.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.