Price Level Indices Research Articles

Aggregated Housing Price Predictions with No Information About Structural Attributes—Hedonic Models: Linear Regression and a Machine Learning Approach

A number of studies have shown that, in hedonic models, the structural attributes of real property have a greater influence on price than external attributes related to location and the immediate neighbourhood. This makes it necessary to include detailed information about structural attributes when predicting prices using regression models and machine learning algorithms and makes it difficult to study the influence of external attributes. In our study of asking prices on the primary residential market in Warsaw (Poland), we used a methodology we developed to determine price indices aggregated to micro-markets, which we further treated as a dependent variable. The analysed database consisted of 10,135 records relating to 2444 residential developments existing as offers on the market at the end of each quarter in the period 2017–2021. Based on these data, aggregated price level indices were determined for 503 micro-markets in which primary market offers were documented. Using the analysed example, we showed that it is possible to predict the value of aggregated price indices based only on aggregated external attributes—location and neighbourhood. Depending on the model, we obtained an R2 value of 75.8% to 82.9% for the prediction in the set of control observations excluded from building the model.

The relationship between regional inequalities in the provision of emergency health services and other health services.

In this research, it was aimed to examine relationship between regional inequalities in the provision of emergency health services and other health services in Turkey. The values of the number of emergency services and the population per emergency service for the years 2002-2021 were taken from the most up-to-date database published by the Ministry of Health in 2022 and were chosen as the dependent variables of the study. The "regional price level indices for consumption expenditures (PLI)" and "gross domestic product per capita, Statistical Regions Level 2 (PcGDP)" data compiled by TURKSTAT were used as independent variables. Number of emergency stations were significantly correlated with TR31 (İzmir) (r = 0.903; P < .01), TR32 (Aydin, Denizli, Muğla) (r = 0.771; P < .01), TR42 (Kocaeli, Sakarya, Düzce, Bolu, Yalova) (r = -0.798; P < .01), TR62 (Adana, Mersin) (r = 0.837; P < .01), TR63 (Hatay, K.Maraş, Osmaniye) (r = -0.749; P < .01), TR72 (Kayseri, Sivas, Yozgat) (r = -0.719; P < .01), TR83 (Samsun, Tokat, Çorum, Amasya) (r = 0.873; P < .01), TRA2 (Ağri, Kars, Iğdir, Ardahan) (r = -0.873; P < .01), TRB2 (Van, Muş, Bitlis, Hakkari) (r = -0.736; P < .01), TRC2 (Şanliurfa, Diyarbakir) (r = 0.697; P < .01), and TRC3 (Mardin, Batman, Şirnak, Siirt) (r = 0.574; P < .01). In total, 11 of 26 were significantly correlated with inequalities. Although the number of emergency services has increased since 2002 and the population density per emergency room has tended to decrease, regional inequalities also have an impact on the delivery of emergency services today.

Calculation of Purchasing Power Parities for Pharmaceutical Products via EURIPID database

Abstract Background Purchasing power parities (PPPs) are indicators of price level differences for all goods and services across countries. Their calculation follows the ÉKS method (https://ec.europa.eu/eurostat/cache/metadata/en/prc_ppp_esms.htm). Prices of pharmaceuticals are collected by national statistical offices using different methods, from asking prices in pharmacies to retrieving scanner data. The sample is limited to 150 top-selling medicines, which are not available in all countries. Consequently, the PLIs (price level indices) and PPPs derived are sometimes based on only 50 pharmaceuticals. In a cooperation between Eurostat and EURIPID the PPP calculation was alternatively done with the EURIPID database for 28 countries. Methods The study compared the PLIs/PPPs derived from the E20-2 “Furniture and health” survey (aka CGS) with those from EURIPID for 2018-2020. The main challenge was to identify comparable products from the 224,448 products in EURIPID. For this we grouped those that shared the same 1) ATC, 2) active substance(s) &amp; strength(s), 3) pack size group and 4) dosage form group (e.g., oromucosal) resulting in 157,186 distinctive products compared to 1,928 included in CGS. We used the Gross Retail price (GRP) as defined in the Eurostat PPP manual. Results The ranking of PPPs was similar in both approaches, with Switzerland and Iceland in the lead and Poland and Hungary in the end. Only for some countries, e.g. the Netherlands deviations were identified. The Pearson correlation between the 2020 PLI for the Euripid subsample using the asterisk method with all products marked as representative and the CGS results was 0,946. Conclusions Results from EURIPID show the same trend as the CGS. It is possible to replace the national data collection by a central source. This would reduce the data collection burden on the statistical offices and allows a closer monitoring of the evolution of pharmaceutical prices (bi-annual PPP publication instead of current 3-year interval) Key messages • To monitor affordability of medicines for all citizens it is important to compare prices on a regular basis with a simple tool as e.g. some products prices differed by 1000-times across countries. • The EURIPID database (www.euripid.eu) allows detailed analysis of pharmaceutical prices in Europe and is available for free to non-commerical researchers.

Thoughts about indexing family benefits: Are authorities permitted to apply the Austrian indexation of family benefits? The primacy of EU law and the right/obligation to request a ruling from the Court of Justice of the European Union

Austria amended legislation, adjusting family benefits such as the family allowance and the deductible family allowance amount to the (lower) price level indices for consumer goods and services (indexation) of the State of residence of the child. This case is not a unique case. In the European Union, similar endeavours were envisaged in several Member States. The Austrian legislation, however, is now being challenged before the CJEU. In the authors’ opinion, this unsuitable cost-saving budget measure contradicts Union law. Consequently, the provisions concerned must remain unapplied. After all, since the Austrian legislation is obviously incompatible with primary Union law, authorities or courts are not even required to refer the matter to the CJEU.

Comparative analysis of energy costs on farms in the European Union: A nonparametric approach

A rational and efficient use of the various sources of energy available to farms allows, not only for cost cutting, but also, a reduction in the environmental impacts bringing positive externalities and contributions toward sustainability. Of course, this efficiency depends on several factors that may influence the dynamics and performance of the farms in question which may also change spatially between countries and regions. These questions related to the great diversity of realities in the agricultural sector are especially relevant within the European Union (EU) context. In this framework, the main objective of the research presented here is to make an efficiency analysis of energy costs in farms across EU countries and regions, stressing possibilities of savings and taking into account the several realities. For this purpose, data at farm level from the Farm Accountancy Data Network (FADN) was considered for the period 2014–2016 which were then explored through the nonparametric approach Data Envelopment Analysis (DEA). For the nonparametric analysis the Cobb-Douglas model was considered as a base. In this way, the total production (euros) was considered as output. Paid labour (hours), the total fixed assets (euros) and the energy costs (euros) were considered as inputs. In an alternative attempt to take into account the different realities across the EU countries the statistical information in monetary units was corrected by the Price Level Indices and was deflated by the Harmonised Indices of Consumer Prices. Furthermore, to alternatively consider the diversity of contexts of the farms from the EU, the several regions and countries here were clustered through cluster analysis, after factor analysis so as to avoid problems of collinearity. As main insights, it is worthy of stressing the possibilities of significantly reducing the costs of energy consumption in farms from many EU regions. For example, it is possible to reduce the costs of energy use by about 55% in Pohjanmaa (Finland), 53% in Cyprus, 56% in Makedonia-Thraki (Greece), 52% in Thessalia (Greece), 56% in Puglia (Italy) and 53% in Basilicata (Italy). In these contexts the Common Agricultural Policy (CAP) should play a determinant role.

Health productivity in macroeconomic level in Turkey: A Multi-level Causality Test approach

Although private health services have been common, it is known that healthis a global public good, and it is related with global public expenditures.Recent studies shoved that productivity in health services is a main domainof government, nongovernmental organizations, and public sector. Thus,increase in productivity of health services provides efficient use of publicgoods. Moreover, public health services and productivity in health sector is apart of macroeconomic level. In this research, it is aimed to evaluate effects ofmacroeconomic indicators in health productivity. In the research, datacollected from Turkey Statistics Institute (TUIK) for 2001-2016 were used toenlighten macroeconomic indicators and health productivity outcomes.According to results of the study, health expenditures and % in GDP rates arecauses for fertility rate (p&lt;0.05). Moreover, health expenditures also causesfor number of health organizations and number of birth (p&lt;0.05). Number ofbirth causes price level indices (p&lt;0.05). All these causality results show thattheir correlations are positive, since both F statistic level and dataobservations support positive correlations.Key words: Health, macroeconomic, productivity

Price convergence in the European Union – What has changed?

This paper investigates price convergence in European Union countries using disaggregated price level indices in the period 1999–2016. Our results show that prices of both tradable and nontradable goods had a significantly lower dispersion in 2016 than in 1999. The convergence was faster in the case of countries with price level below the average, which can be interpreted as catching-up. However, further analysis shows that most prices converged only up to 2008. While prices of transport equipment continue to converge across the European Union, several durable consumption categories show price divergence after 2008. We attribute this to the drop in international trade of durable products due to increasing inflation and exchange rates volatility following the global financial crisis. From the monetary policy perspective, the existing price-level gaps, shown in our study, may pose a risk of higher inflation, especially in catching-up economies.

Drug affordability–potential tool for comparing illicit drug markets

BackgroundThe importance of illicit drug price data and making appropriate adjustments for purity has been repeatedly highlighted for understanding illicit drug markets. The European Monitoring Centre for Drugs and Drug Addiction (EMCDDA) has been collecting retail price data for a number of drug types alongside drug-specific purity information for over 15 years. While these data are useful for a number of monitoring and analytical purposes, they are not without their limitations and there are circumstances where additional adjustment needs to be considered. This paper reviews some conceptual issues and measurement challenges relevant to the interpretation of price data. It also highlights the issues with between-country comparisons of drug prices and introduces the concept of affordability of drugs, going beyond purity-adjustment to account for varying national economies. MethodsBased on a 2015 European data set of price and purity data across the heroin and cocaine retail markets, the paper demonstrates a new model for drug market comparative analysis; calculation of drug affordability is achieved by applying to purity-adjusted prices 2015 Price Level Indices (PLI, Eurostat). ResultsAvailable data allowed retail heroin and cocaine market comparison for 27 European countries. The lowest and highest unadjusted prices per gram were observed for heroin: in Estonia, Belgium, Greece and Bulgaria (lowest) and Finland, Ireland, Sweden and Latvia (highest); for cocaine: the Netherlands, Belgium and the United Kingdom (lowest) and Turkey, Finland, Estonia and Romania (highest). The affordability per gram of heroin and cocaine when taking into account adjustment for both purity and economy demonstrates different patterns. ConclusionIt is argued that purity-adjusted price alone provides an incomplete comparison of retail price across countries. The proposed new method takes account of the differing economic conditions within European countries, thus providing a more sophisticated tool for cross-national comparisons of retail drug markets in Europe. Future work will need to examine other potential uses of the drug affordability tool. LimitationsThe limitations of this measure reflect primarily the limitations of the constituent data; in addition to issues inherent in collecting accurate data on illicit markets, analysis that relies on data collected from multiple countries is susceptible to discrepancies in data collection practices from country to country.

THE PRICE EVOLUTION IN THE CONTEXT OF ECONOMIC CRISIS

The economic crisis is a negative macroeconomic phenomenon with consequences both at European Union level and worldwide. The main objective of this paper is to analyse the variation of price levels in Romania, during the economic crisis until the end of 2015, compared with the Member States of the European Union and the countries of the European Free Trade Association. For this research, information provided by EUROSTAT was used, such as price level indices for actual individual consumption per capita, and for different goods and services, calculated based on purchasing power parity. The aim is to identify solutions to rising living standards, compared with more developed countries of the European Union. This paper presents possible solutions for avoiding a future economic crisis, caused by overconsumption. The paper is divided into four sections: introduction, part two which presents aspects of the economic crisis in Romania and in the European Union, the third part presents price level indices for different products and services in 2015, and the last part, the conclusions of the research.

A unified framework for the estimation of intra and inter country food purchasing power parities

PurposeThe purpose of this paper is to extend the methodology proposed in Majumderet al.(2012) for the estimation of the item-specific purchasing power parities (PPPs) within countries, to the cross-country context. It estimates item-specific intra-country PPPs (i.e. spatial prices) and inter-country PPPs in a unified framework using unit records of household food expenditures from three Asian countries: India, Indonesia and Vietnam, covering contemporaneous time periods. The study addresses a key limitation of the International Comparison Program (ICP) exercise, namely, that it treats all countries, large and small, as homogeneous entities. Moreover, it directly calculates bilateral PPPs between countries based on their expenditure patterns and prices alone and directly estimates the price-level indices (PLI) and their standard errors, allowing formal tests of the hypothesis of PLI being unity. The usefulness of the estimated PPPs is illustrated by applying them to comparisons of real food expenditures between the three countries, and benchmarking the comparisons with those using the ICP PPPs.Design/methodology/approachThe methodology is based on the fact that a spatial price index can be viewed as a true cost of living index (TCLI). Using a general cost function underlying the Rank 3 quadratic logarithmic systems, the TCLI is calculated for a reference utility level.FindingsThe study provides formal statistical tests of the hypothesis of item invariance of the PPPs. The usefulness of the proposed methodology is illustrated by applying the estimated PPPs in comparisons of food expenditures between subgroups in the three countries. The sensitivity of the expenditure comparisons to the use of item-wise PPPs underlines the need to provide price information on highly disaggregated PPPs to a much greater extent than the ICP has done to date.Research limitations/implicationsThe choice of these three Asian countries was dictated by the fact that, though comparability of items between them remains an issue as with all cross-country comparisons. Also, in the absence of price data, this study followed the practice in Majumder et al. (2012, 2015a, 2015b) in using as proxies the raw unit values of the food items, but adjusted for quality and demographic factors using the procedure introduced by Cox and Wohlgenant (1986) and extended by Hoang (2009).Practical implicationsIt addresses some limitations of the ICP, namely, ICP treats all countries as single entities with the purchasing power of the country’s currency assumed to be the same in all regions within the country, ICP uses the US dollar as the numeraire (this ignores the fact that the PPPs required in bilateral welfare comparisons between developing countries with vastly different consumption habits from the “international norm” are quite different from the ICP PPPs) and ICP uses distribution invariant prices to calculate PPPs, which overlooks the fact that the poor pay different prices from the “representative” individual.Social implicationsThis study highlights the importance of estimating and using item-specific PPPs in cross-country comparisons by formally testing and rejecting the assumption of item invariant PPPs and by providing empirical evidence that they do make a difference to the welfare comparisons between countries. This study provides PPPs based on food items only, which may be more relevant for poverty comparisons.Originality/valueIt introduces, for the first time, the concept of item-specific PPPs between countries as estimable parameters and operationalizes this concept by using them in cross-country welfare comparisons.

Metrics Meta About a Metametric: The Consumer Price Level as a Flawed Target for Central Bank Policy

:Inflation targeting is currently the policy of choice for central banks. This policy invariably targets consumer price inflation, which is only one of many available price level indices (such as prices of new investments and house prices). As there is no stable relationship between these price levels, and as differences in developments between the different price levels might induce destabilizing behavior, there is no reason why “low and stable” consumer price inflation should guarantee monetary and financial stability. Following John Maynard Keynes, a “low and stable” increase of average nominal wages might do a better job. As price levels are designed to estimate the purchasing power of spending power and as income, and spending power are used to not just consume or invest but also to pay down many kinds of (gross) debt, it is advisable to use a joint definition of monetary and financial stability, which combines stable purchasing power of monetary income with a stable ability of households and companies to pay off debts.

Closing the East–West Life Expectancy Gap in the European Union: A New Strategy

According to recent studies, the difference in life expectancy -the gap-between eastern and western countries of the European Union (EU) grows continuously. We have analyzed data on life expectancy and household expenditure, corrected by price level indices, in the countries of the EU. We have found that eastern European countries have less total health expenditure, but expenditures on tobacco and alcohol dominate. We propose a new strategy for closing the gap, by promoting health care spending, public and private investments in life extension, and radical life extension research in the eastern countries of the EU.

A Statistical Analysis of Prices of Electrical and Electronic Equipment after the Introduction of the WEEE Directive

SummaryIn January 2003, the European Union (EU) issued a directive on e‐waste (waste from electrical and electronic equipment; WEEE) to deal with increasing quantities and the included hazardous components. The WEEE Directive is based on the principle of extended producer responsibility, which shifts the responsibility for end of life of products away from municipalities toward producers. This led some researchers to state that, in theory, the costs of waste treatment are passed on to consumers in terms of higher prices. This work addresses two fundamental questions: (1) Did the introduction of the WEEE Directive increase consumer prices of electrical and electronic equipment (EEE)? and (2) how much is this price increase? We carry out, for the first time in the literature, a quantitative research on price variation of the vast majority of EEE sold in the EU after the introduction of producers’ financial responsibility. The panel data include 972 price level indices, namely, six categories of EEE for 27 member states for six years. The main result is that the average variation of the prices for each category of EEE investigated actually increased and the variation was between 0.71% and 3.88%, depending on the specific category of EEE. The average increase of 2.19% is in line with the previous studies that estimated the impact of the WEEE Directive up to a 3% increase of the product price. The t‐test performed on the data shows a good statistical significance, which strengthens the relevance of the results. Finally, future directions for research are included.

ACHIEVEMENTS OF LITHUANIAN SUSTAINABLE DEVELOPMENT DURING THE INTEGRATION PROCESS INTO THE EUROPEAN UNION

After the collapse of the Soviet Union, Lithuania rapidly started turning towards European trade patterns averting from those of the former communist regime. However, European integration has had an effect not only on convergence of gross domestic product (GDP) but also on convergence of prices as well as on alteration of living standards. The goals of Lithuanian integration to the EU were noted in the National Lithuanian Sustainable Development Strategy. The key objective of sustainable development in Lithuania was to achieve the present developmental level of the EU countries according to indicators of economic and social development. Therefore, the paper compares the convergence across the old and newer member-states of the EU in terms of GDP, household final consumption expenditure and comparative price level indices. In addition, it is revealed that Lithuanian expenditure patterns rapidly approach those of the old member-states of the EU. Consequently, Lithuanian integration to the EU contributes to approaching the EU-15 level what means the successful achievements of Sustainable Development Strategy as well. So, the aim of this paper is to show how successful are Lithuanian sustainable development achievements in terms of GDP, comparative price level and household expenditure within framework of integration to the EU.