Estimating the Price of Rents in Regional Price Parities

In May of 2011, BEA published prototype estimates of 5-year regional price parities for states and metropolitan areas for 16 expenditure classes, including rents, for the 2005-2009 period. In previous research (see: Aten & Reinsdorf [2010], Aten & Heston [2009]), differences in interarea price comparisons were evaluated using various methods of constructing the multilateral indexes. In this paper we explore some of these results with respect to different treatments of shelter costs (rents), using data from both the Consumer Price Index and the American Community Survey.