Regional inequality in the U.S. evidence from city-level purchasing power

Chi-Young Choi, Horag Choi, Alexander Chudik

Research output: Contribution to journalArticleResearchpeer-review

Abstract

Using quarterly data for 42 products over the period from 1990 to 2015, we find that there has been a large and growing dispersion of purchasing power across U.S. cities since 1990 and the dispersion varies widely across products. We also find that total factor productivity shock precedes or predicts the rise in regional inequality of purchasing power. We view that the growing regional inequality found in the purchasing power among U.S. cities might have proceeded after nationwide productivity shocks mainly by the cities with higher share of skilled workers through the products with more flexible price adjustments.

Original languageEnglish
Number of pages37
JournalJournal of Regional Science
DOIs
Publication statusAccepted/In press - 2020

Keywords

  • GVAR model
  • purchasing power
  • regional inequality
  • TFP shocks
  • U.S. cities

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