This paper studies the dynamic behavior of city-level cost of living measured by consumer price index (CPI) with special emphasis on their convergence patterns. Individual price indices are modeled by allowing for apparent heterogeneous transitions. L...
This paper studies the dynamic behavior of city-level cost of living measured by consumer price index (CPI) with special emphasis on their convergence patterns. Individual price indices are modeled by allowing for apparent heterogeneous transitions. Log t
convergence test results indicate that most major cities in Korea do not converge to a common stochastic trend for cost of living and thus they are better explained by a multiple-component model. The application of clustering algorithm confirms the presence of club convergence for the individual price indices.