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Estimating Cross Province and Municipal City Price Level Differences in China: Some Experiments and Results

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  • Luigi Biggeri

    (University of Florence)

  • Guido Ferrari

    (University of Florence
    Renmin University of China)

  • Yanyun Zhao

    (Renmin University of China)

Abstract

The estimation of Sub-national purchasing power parities (PPPs) for countries where the regions and provinces have different level of development is fundamental for income, consumption, standard of living real term comparisons, as well as for measuring cross-region welfare inequality. This is even truer for large countries like China, where the above aggregates exhibit great variability among provinces. The aim of this paper is to compute the price level differences, measured by the PPPs, for 31 Chinese Provinces and Municipal Cities, based on a sample of 62 goods and services for the year 2014. To our knowledge, this is the first attempt to do it since many years. After a short review of previous studies on China cross-province and municipal cities price level differences measurement and the illustration of methodology and data used, the results of our elaborations are presented and discussed. Taking Beijing as the base area, there is evidence that the PPP max/min ratio is 1.74, confirming the common belief that China cross-province and municipal cities price levels are significantly different.

Suggested Citation

  • Luigi Biggeri & Guido Ferrari & Yanyun Zhao, 2017. "Estimating Cross Province and Municipal City Price Level Differences in China: Some Experiments and Results," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 131(1), pages 169-187, March.
    • Handle: RePEc:spr:soinre:v:131:y:2017:i:1:d:10.1007_s11205-016-1238-0
    DOI: 10.1007/s11205-016-1238-0
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    References listed on IDEAS

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