Regional price levels and the agglomeration wage differential in western Germany

Faculty/Professorship: Regional Labour Economics  
Author(s): Blien, Uwe; Gartner, Hermann; Stüber, Heiko; Wolf, Katja
Title of the Journal: The annals of regional science : an international journal of urban, regional and environmental research and policy ; official journal of the Western Regional Science Association
ISSN: 0570-1864
Publisher Information: Berlin ; Heidelberg : Springer
Year of publication: 2009
Volume: 43
Issue: 1
Pages: 71-88
Language(s): English
DOI: 10.1007/s00168-007-0205-8
"We analyse whether wage differences between cities and rural areas in western Germany are due to unobserved differences in regional price levels. Since regional prices are available for only 10% of the regions we use multiple imputation to generate prices for all regions. Our results show that the nominal agglomeration wage differential is 25%, whereas the real differential is 19%. If we control for the composition of the labour force and jobs, the real wage differential is 4%. If we additionally control for differences in regional building land prices the agglomeration wage differential vanishes."
Type: Article
Year of publication: 29. July 2015