Studies Of Purchasing Power Parity In Different Regions Of China Based On Minimum Spanning Trees Method

China's economy develops very quickly.From one of the poorest countries all over the world,China develops into a fast-paced economy with GDP ranking the second in the world in 2014.As the whole economy thrives greatly,how are the economies in each part of China?Are they beneficial in the long run?To find out this question,based on Minimum Spanning Trees Method(MSTM),this thesis calculates Purchasing Power Parity(PPP)of each regions and evaluates their regional economical development.This whole thesis includes six parts.The first part is the literature review of the background and PPP,including the basic structure of the research;the second part studies the advantages and disadvantages of the relevant International Comparison Programs,and reviews literature in MSTM,explaining the applicability of MSTM in Chinese regional economies;the third part analyzes the specific operational procedures of MSTM,including choosing the bilateral indexes.making the spanning trees and ensuring its stability;the fourth part calculates the average index of regional PPP in China and obtains two kinds of PPP,PPP(1)and PPP(2),with two calculating results;the fifth part is the application of PPP theory in regions of China,adjusting the total GDP in each region by indexes of two PPP,analyzing the regional economical differences and fully grasping the extent of the uncoordinated development;the sixth part is the conclusion,proposing suggestions and explaining the innovation and shortcomings of this thesis.Conclusions are as the following:except the price factor,China's regional economies still differ to a great extent;prices are relatively high in most developed regions and low in less developed regions;education,healthcare and housing services data have great influence on PPP calculation and require accurate evaluation;using MSTM to calculate China's PPP is of certain research values while MSTM is of stability.This thesis is innovative because PPP is applied in regional economic comparison in China,and it has chosen the most suitable MSTM for our country's regional economy,making an attempt to "regional economic comparison in a country".The shortcoming of this thesis is that the accuracy and breadth of the data collected cannot be guaranteed,however,detailed explanation about the data has been made to make sure the conclusion can be used for a reference.