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Spatial Inequality and Development$
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Ravi Kanbur and Anthony J. Venables

Print publication date: 2005

Print ISBN-13: 9780199278633

Published to Oxford Scholarship Online: April 2005

DOI: 10.1093/0199278636.001.0001

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Regional Output Differences in International Perspective

Regional Output Differences in International Perspective

Chapter:
(p.15) 2 Regional Output Differences in International Perspective
Source:
Spatial Inequality and Development
Author(s):

Ravi Kanbur

Anthony J. Venables

Publisher:
Oxford University Press
DOI:10.1093/0199278636.003.0002

Accurate regional estimates of output are desired as an indicator of level of development and as a variable used to explain internal migration, demand patterns, fertility and other aspects of behaviour. Explores one often-neglected aspect of regional income differences, namely, that due to price differences or regional purchasing power parities. When nominal regional income measures are adjusted for these price level differences they are termed real regional incomes. The preferred method of estimating regional purchasing power parities by detailed price comparisons is discussed for Brazil, the United States and the European Union. The empirical thrust of the chapter is an investigation of different methods for estimating regional real incomes based on PPP data for 167 countries and nominal regional incomes and other data for about 870 administrative areas at the sub-national level. Even in their present form the authors believe the real income estimates provided for the geographical units present opportunities for understanding the world economic structure.

Keywords:   purchasing power parities, regional price levels, spatial models

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