25 research outputs found
Goods Prices and Availability in Cities
This paper uses detailed barcode data on purchase transactions by households in 49 U.S. cities to calculate the first theoretically-founded urban price index. In doing so, we overcome a large number of problems that have plagued spatial price index measurement. We identify two important sources of bias. Heterogeneity bias arises from comparing different goods in different locations, and variety bias arises from not correcting for the fact that some goods are unavailable in some locations. Eliminating heterogeneity bias causes 97 percent of the variance in the price level of food products across cities to disappear relative to a conventional index. Eliminating both biases reverses the common finding that prices tend to be higher in larger cities. Instead, we find that price level for food products falls with city size
Goods Prices and Availability in Cities
This paper uses detailed barcode data on purchase transactions by households in 49 U.S. cities to overcome a large number of problems that have plagued spatial price index measurement. We identify two important sources of bias. Heterogeneity bias arises from comparing different goods in different locations, and variety bias arises from not correcting for the fact that some goods are unavailable in some locations. Eliminating heterogeneity bias causes 97 percent of the variance in the price level of food products across cities to disappear relative to a conventional index. Eliminating both biases reverses the common finding that prices tend to be higher in larger cities. Instead, we find that price level for food products falls with city size.
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Essays on Prices and Variety Across Cities
In Krugman (1991), agglomeration is driven by consumption externalities related to differences in the average price across locations. Variety plays a central role here: the price index is lower in larger cities because more varieties are produced there, but all products are available everywhere, so there are no direct consumption gains from variety. Chapter 1 extends this model to allow for these variety differences across cities via an extensive margin of intercity trade. In this model, scale economies yield more production variety in larger cities so that, with positive trade costs, consumers in these locations can benefit from two consumption advantages - lower average prices and more varieties of products. This model sets the stage for the empirical chapters that measure the impact of these consumption benefits on consumer utility. The urban economics literature has paid relatively little attention to these consumption externalities for two reasons. First, the fact that wages are higher in larger cities indicates, in the context of a spatial equilibrium model, that purchasing power must be lower in these locations, which is inconsistent with the NEG theoretical predictions that price indexes are lower in larger cities. Second, there are reasons to believe that intranational trade frictions are much smaller than those across international borders. While there is a large body of work documenting that these frictions yield significant variation in the prices charged and varieties offered across different countries, we know relatively little about the spatial variation of price and variety in a domestic context. Chapter 2, co-authored with David E. Weinstein, addresses both of these issues. We first show that, controlling for purchaser demographics and store amenities, the prices of tradable products do, in fact, vary across cities as predicted by Krugman (1991). Additionally, we find that there are significant differences in the variety of products offered in large as opposed to small cities. We finally measure the extent to which this variation in prices and variety lowers price indexes for tradable products in large cities relative to small cities. This low price index over tradables in large cities is consistent with nominal wages being higher there, as long as there are congestion costs that equalize real income across locations. A major assumption in the work described above is that the consumption benefits of cities do not vary systematically across consumer types. The final chapter of my dissertation considers how systematic differences in prices and variety across space might impact different individuals differently. Previous research has tested whether firms vary prices and product offerings in order to cater local tastes in a market. I extend this analysis to structurally estimate how this behavior of individual firms differentially affects the price indexes faced by consumers with systematically heterogeneous tastes. I allow for tastes to vary with income and find that poor consumers face lower costs in low-income cities, while the opposite holds for wealthy consumers, whose tastes are better-suited to the variety of products available in high-income cities. In conclusion, this dissertation finds that there is significant variation in prices and variety across U.S. cities. In particular, the spatial distributions of prices, variety, and consumers in the U.S. are correlated in a manner consistent with there being consumption externalities. Consumers in larger cities have access to more varieties of products at a lower average price and, conditional on city size, consumers have access to varieties better-suited to the tastes of they share with their income group in cities with per capita incomes closer to their own. These patterns are reflected in the variation in the tradables price indexes that consumers face across large and small and across wealthy and poor cities. This evidence on the existence of the pecuniary consumption externalities hypothesized in early NEG papers supports a growing literature exploring the role of consmption externalities in generating the aggregate and skill-biased agglomeration patterns that the more recent NEG literature associates with production externalities
"The Financial Requirements of Achieving Gender Equality and Women's Empowerment"
Although the Millennium Development Goals (MDGs) have been ratified in global and national forums, they have not yet been incorporated into operational planning within governments or international organizations. The weak link between the policies and the investments needed for their implementation is one barrier to progress. An assessment of the resources required is a critical first step in formulating and implementing strategies to achieve the MDGs. This is especially true for policies to promote gender equality and empower women. Although enough is known about such policies to implement them successfully, the costs of such interventions are not systematically calculated and integrated into country-level budgeting processes. Using country-level data, the paper estimates the costs of interventions aimed at promoting gender equality and women's empowerment in Bangladesh, Cambodia, Ghana, Tanzania, and Uganda. It then uses these estimates to calculate the costs of such interventions in other low-income countries. Finally, the paper projects the financing gap for interventions that aim directly at achieving gender equality, first for the five countries, and subsequently for all low-income countries.
Measuring Movement and Social Contact with Smartphone Data: A Real-time Application to COVID-19
Tracking human activity in real time and at fine spatial scale is particularly valuable during episodes such as the COVID-19 pandemic. In this paper, we discuss the suitability of smartphone data for quantifying movement and social contact. We show that these data cover broad sections of the US population and exhibit movement patterns similar to conventional survey data. We develop and make publicly available a location exposure index that summarizes county-to-county movements and a device exposure index that quantifies social contact within venues. We use these indices to document how pandemic-induced reductions in activity vary across people and places
Differences in the Local Food Environment Are Not the Main Cause of Nutritional Inequality
How Much Do Official Price Indexes Tell Us About Inflation?
Official price indexes, such as the CPI, are imperfect indicators of inflation calculated using ad hoc price formulae different from the theoretically well-founded inflation indexes favored by economists. This paper provides the first estimate of how accurately the CPI informs us about “true” inflation. We use the largest price and quantity dataset ever employed in economics to build a Törnqvist inflation index for Japan between 1989 and 2010. Our comparison of this true inflation index with the CPI indicates that the CPI bias is not constant but depends on the level of inflation. We show the informativeness of the CPI rises with inflation. When measured inflation is low (less than 2.4% per year) the CPI is a poor predictor of true inflation even over 12-month periods. Outside this range, the CPI is a much better measure of inflation. We find that the U.S. PCE Deflator methodology is superior to the Japanese CPI methodology but still exhibits substantial measurement error and biases rendering it a problematic predictor of inflation in low inflation regimes as well.2012~2016年度科学研究費補助金[基盤研究(S)]「長期デフレの解明」(研究代表者 東京大学経済学研究科・渡辺努, 課題番号:24223003
How Much Do Official Price Indexes Tell Us About Inflation?
Official price indexes, such as the CPI, are imperfect indicators of inflation calculated using ad hoc price formulae different from the theoretically well-founded inflation indexes favored by economists. This paper provides the first estimate of how accurately the CPI informs us about “true” inflation. We use the largest price and quantity dataset ever employed in economics to build a Törnqvist inflation index for Japan between 1989 and 2010. Our comparison of this true inflation index with the CPI indicates that the CPI bias is not constant but depends on the level of inflation. We show the informativeness of the CPI rises with inflation. When measured inflation is low (less than 2.4% per year) the CPI is a poor predictor of true inflation even over 12-month periods. Outside this range, the CPI is a much better measure of inflation. We find that the U.S. PCE Deflator methodology is superior to the Japanese CPI methodology but still exhibits substantial measurement error and biases rendering it a problematic predictor of inflation in low inflation regimes as well.2012~2016年度科学研究費補助金[基盤研究(S)]「長期デフレの解明」(研究代表者 東京大学経済学研究科・渡辺努, 課題番号:24223003