Construction And Application Of Relative Price Index Based On Revenue Purchasing Power

For a long time,comparing the relative prices among different regions or countries and the comparison of the living standards of residents in different regions have received extensive attention and is also a hot topic in academia.At present,the measurement of economic development disparities and living standards in different regions is generally measured using per capita GDP or purchasing power parity(PPP).Using per capita GDP calculated by countries' actual exchange rates and using PPP to measure relative prices,has its own rationality,but in addition to the inherent deviation of statistics,there are still significant limitations.From the perspective of life and microscopic view,this paper will reconstruct a new relative price index to measure the living standard of residents in different regions.This differs from the macro perspective of per capita GDP and the PPP,but from the perspective of the income level and the price level of the two residents' living factors,comparing the income levels of residents in different regions,and how much living goods can be purchased locally at this level of income.This paper will start from the life and microscopic perspective,and reconstruct a new relative price index to measure the living standards of residents in different regions.This differs from the macro perspective of per capita GDP and PPP,but from the perspective of the income level and the price level of the two residents' living factors,comparing the income levels of residents in different regions,and how much can be purchased locally at this level of income.Life supplies are evaluated.Therefore,we call the newly constructed index the Local Income Purchasing Power(LPI).The Local Income Purchasing Power Index(LPI)is inspired by the theory of purchasing power parity(PPP),based on the residents' consumption of various types of main commodities and services and cost price.It analyzes the purchasing power of residents' annual income levels for various types of goods and services,and it also compares the actual living standards of residents that reflect the relative price differences between regions.The local income purchasing power index(LPI)can be used for comparison within a country,as well as in different countries.Firstly,this paper analyzes what is the income purchasing power index,which is different from the concepts of the general purchasing power parity index and the cost-of-living index calculated by the exchange rate.Secondly,it analyzes the existing obstacles and deficiencies in the traditional purchasing power parity index measurement,and the applicability of income purchasing power index in measuring the purchasing power of residents in different regions.Then,it calculates the cost of living index(CLI)applied in assessing different income classes,then calculates regional income purchasing power index(LPI)by using CLI and residents' income simultaneously.Finally,by using the real data of Xiamen and kaohsiung from 2004 to 2014,it calculates the per capita income and residents' purchasing power index of income of the two places,compares and analyzes the calculation results,and draw conclusions and puts forward some relevant suggestions.According to the calculated result,the local income purchasing power index(LPI)can not only accurately compare the purchasing power of different regions,but also measure the income level of the residents.It can also be used as a basis for exchange rates between different countries,and describes the different currencies from a microscopic perspective.The purchasing power between.