A Panel of Interarea Price Indices for All Areas in the United States 1982-2012 Dec 01, 2014 By Edgar O. OlsenPaul CarrilloDirk Early A Panel of Interarea Price Indices for All Areas in the United States 1982-2012 This paper documents the production of a panel of price indices for housing services, other produced goods, and all produced goods for each metropolitan area in the United States and the non-metropolitan part of each state from 1982 through 2012 that can be used for estimating behavioral relationships, studying the workings of markets, and assessing differences in the economic circumstances of people living in different areas. Our general approach is to first produce cross-sectional price indices for a single year 2000 and then use BLS time-series price indices to create the panel. Our geographic housing price index for 2000 is based on a large data set with detailed information about the characteristics of dwelling units and their neighborhoods throughout the United States that enables us to overcome many shortcomings of existing interarea housing price indices. For most areas, our price index for all goods other than housing is calculated from the price indices for categories of non-housing goods produced each quarter by the Council for Community and Economic Research. In order to produce a non-housing price index for areas of the United States not covered by their index, we estimate a theoretically-based regression model explaining differences in the composite price index for non-housing goods for areas where it is available and use it to predict a price of other goods for the uncovered areas. The overall consumer price index for all areas is based on the preceding estimates of the price of housing and other goods. The paper discusses existing interarea price indices available to researchers, compares the new housing price index with housing price indices based on alternative methods using the same data and price indices based on alternative data sets, and illustrates the use of the price indices by estimating housing demand functions. Electronic versions of the price indices are available online. Journal of Housing Economics Journal of Housing Economics Edgar O. Olsen Ed Olsen is a professor emeritus of economics at the University of Virginia, where he has served as chairman of the economics department and was heavily involved in the creation and development of the Frank Batten School of Leadership and Public Policy. Olsen's teaching and research has focused on public policy issues, especially concerning the welfare system. Within this broad area, his research specialty is low-income housing policy. Read full bio Paul Carrillo Dirk Early Related Content Edgar O. Olsen Does HUD Overpay for Voucher Units, and Will SAFMRs Reduce the Overpayment? Research One argument for Small Area Fair Market Rents (SAFMRs) is that they would reduce overpayment for voucher units in low-rent neighborhoods. This article provides a more comprehensive theoretical analysis that leads to the conclusion that the worst voucher units and those in the worst neighborhoods will usually rent for more than the mean market rent of identical units, and the best units in the best neighborhoods will rent for less than this amount. Racial Rent Differences in U.S. Housing Markets Research This paper exploits an unusually rich data set to estimate racial differences in the rents paid for identical housing in the same neighborhood in U.S. housing markets and how they vary with neighborhood racial composition. It overcomes the shortcomings of the data used in previous studies. Results suggest that households led by blacks pay more for identical housing in identical neighborhoods than their white counterparts and that this rent gap increases with the fraction of the neighborhood white.