A Panel of Price Indices for Housing, Other Goods, and All Goods for All Areas in the United States 1982-2008

63 Pages Posted: 7 Jan 2011

See all articles by Paul E. Carrillo

Paul E. Carrillo

George Washington University - Department of Economics

Dirk W. Early

Southwestern University - Department of Economics and Business

Edgar O. Olsen

University of Virginia - Department of Economics

Date Written: December 8, 2010

Abstract

This paper produces a panel of price indices for housing, other produced goods, and all produced goods for each metropolitan area in the United States and the non-metropolitan part of each state from 1982 through 2008 that can be used for estimating behavioral relationships, studying the workings of markets, and assessing differences in the economic circumstances of people living in different areas. Our general approach is to first produce cross-sectional price indices for a single year 2000 and then use BLS time-series price indices to create the panel. Our geographic housing price index for 2000 is based on a large data set with detailed information about the characteristics of dwelling units and their neighborhoods throughout the United States that enables us to overcome many shortcomings of existing interarea housing price indices. For most areas, our price index for all goods other than housing is calculated from the price indices for categories of non-housing goods produced each quarter by the Council for Community and Economic Research. In order to produce a non-housing price index for areas of the United States not covered by their index, we estimate a theoretically-based regression model explaining differences in the composite price index for non-housing goods for areas where it is available and use it to predict a price of other goods for the uncovered areas. The overall consumer price index for all areas is based on the preceding estimates of the price of housing and other goods. The paper also discusses existing interarea price indices available to researchers, and it compares the new housing price index with housing price indices based on alternative methods using the same data and price indices based on alternative data sets. Electronic versions of the price indices are available online.

Keywords: interarea price indices, interarea housing price indices, geographic cost-of-living differences, geographic price differences

JEL Classification: C8, R1, R2, R3

Suggested Citation

Carrillo, Paul E. and Early, Dirk W. and Olsen, Edgar O., A Panel of Price Indices for Housing, Other Goods, and All Goods for All Areas in the United States 1982-2008 (December 8, 2010). Available at SSRN: https://ssrn.com/abstract=1733984 or http://dx.doi.org/10.2139/ssrn.1733984

Paul E. Carrillo

George Washington University - Department of Economics ( email )

Monroe Hall Suite 340
2115 G Street NW
Washington, DC 20052
United States

Dirk W. Early

Southwestern University - Department of Economics and Business ( email )

1001 East University Avenue
Georgetown, TX 78626
United States
513-863-1592 (Phone)

Edgar O. Olsen (Contact Author)

University of Virginia - Department of Economics ( email )

P.O. Box 400182
Charlottesville, VA 22904-4182
United States
434-924-3443 (Phone)
434-924-2904 (Fax)

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