As an extension of the neoclassical urban systems theory （Henderson, 1974）, we develop a general theory of regional （inter-city） price dispersion which also explains the ＂subnational Penn effect,＂ i.e., cross-ci...As an extension of the neoclassical urban systems theory （Henderson, 1974）, we develop a general theory of regional （inter-city） price dispersion which also explains the ＂subnational Penn effect,＂ i.e., cross-city correlations among population size, prices, real income and human capital stock. The model is also a theory of international price dispersion that is observationally equivalent to and more appealing than the Balassa-Samuelson theory, implying that the （international） Penn effect may simply be an aggregate result of the ＂subnational Penn effect.＂ Furthermore, it shows that, contrary to the popular view, economic integration can increase as well as decrease spatial price variation.展开更多
In this paper we estimate relative consumer price levels as of 2008 for 36 major Chinese cities, using an innovative method purposely designed to rectify three main defects of the existing literature, which are （1） ...In this paper we estimate relative consumer price levels as of 2008 for 36 major Chinese cities, using an innovative method purposely designed to rectify three main defects of the existing literature, which are （1） the under-representation of marketized services in the sample data, （2） biased consumption weights, and （3） a mismatch between sample classification and consumption weights. Our estimation results show the ＂subnational Penn effect＂ as defined by Tang （2012）, i.e., strong inter-city correlations among population size, the relative price level, per capita nominal and real income, and human capital stock, thereby showing that the theoretical model of inter-city price dispersion proposed by Tang （2012） is applicable in China. Our conclusion, methodology, and estimation results have important implications for various aspects of the Chinese economy including the regional, urban and real-estate economies.展开更多
文摘As an extension of the neoclassical urban systems theory （Henderson, 1974）, we develop a general theory of regional （inter-city） price dispersion which also explains the ＂subnational Penn effect,＂ i.e., cross-city correlations among population size, prices, real income and human capital stock. The model is also a theory of international price dispersion that is observationally equivalent to and more appealing than the Balassa-Samuelson theory, implying that the （international） Penn effect may simply be an aggregate result of the ＂subnational Penn effect.＂ Furthermore, it shows that, contrary to the popular view, economic integration can increase as well as decrease spatial price variation.
文摘In this paper we estimate relative consumer price levels as of 2008 for 36 major Chinese cities, using an innovative method purposely designed to rectify three main defects of the existing literature, which are （1） the under-representation of marketized services in the sample data, （2） biased consumption weights, and （3） a mismatch between sample classification and consumption weights. Our estimation results show the ＂subnational Penn effect＂ as defined by Tang （2012）, i.e., strong inter-city correlations among population size, the relative price level, per capita nominal and real income, and human capital stock, thereby showing that the theoretical model of inter-city price dispersion proposed by Tang （2012） is applicable in China. Our conclusion, methodology, and estimation results have important implications for various aspects of the Chinese economy including the regional, urban and real-estate economies.
