Research On The Shortest Distance Measurement Of Purchasing Power Parity In France

As an economic giant,China has huge differences among regions in terms of resource endowment,scarcity of factors,relative price and development level.Current researches of measuring the economic development gap between regions are mainly measured by nominal indicators,without considering price factors,which make the final results always overestimated or underestimated.To address the above issues,based on the theory of purchasing power parity(PPP),we take the degree of regional similarity into consideration and quantify the price level differences by estimating price levels of 31provinces(municipalities and autonomous regions),and then revise the nominal index to measure the economic development differences,so as to make the results more realistic.This paper includes seven chapters.The first part introduces the background and significance of the research,as well as related domestic and foreign studies.The second part describes the relevant theories of sub-national PPP measurement.Starting from the "law of one price",we introduce the PPP theory,the important significance of SNA as well as the formulas and properties of bilateral comparison index and multilateral aggregation index.The third part describes the principles and procedures of Minimum Spanning Tree(MST)and Minimum Distance(MD)method,and also determine the indexes to measure the the similarity of consumption structures among regions of the Paasche Laspeyres Spread index(PLS),the Weighted logarithmic Quadratic index(WLQ)and the Weighted progressive Quadratic index(WAQ).The fourth part analyzes the applicability,advantages and disadvantages of the MD method.The fifth part makes a brief analysis of PPP results,taking Shandong as the benchmark area(PPP=1),we estimate the price levels from the perspective of "provinces" and "eight economic zones".The sixth part is the analysis of application results.The sub-national PPP are applied to the adjustment of regional GDP,per capita disposable income and the calculation of regional poverty line to eliminate the factors of price levels.The seventh part summarizes the main conclusions and puts forward the possible innovation points and limitations.Through the above researches,the main conclusions of this paper are as follows:(1)In terms of the selection of similarity indexes,WLQ and WAQ indexes are more suitable than PLS to measure the similarity of different regions in China.By comparing the linking generated by different indexes,it is found that the linking paths generated by WLQ and WAQ are the same,which are more in line with the expectation than PLS.(2)In terms of the method of measuring sub-national PPP,the MD method is significantly better than the MST method.MST can compare the regions with similar consumption structures directly by screening the optimal combination of the comparison regions,but it only has the optimal property with respect to the overall spanning tree.And there is no guarantee that any given binary comparison constructed using the chain of links implied by the MST are the best.However,MD can satisfy this property and the similarity of the regions in the contrastive path is higher.(3)In terms of the result of sub-national PPP,there are 13 provinces' PPPs are greater than 1 and 17 provinces' PPPs are less than 1.The top five provinces are Zhejiang,Guangdong,Hainan,Shanghai,and Jiangsu,and the bottom five provinces are Gansu,Ningxia,Hebei,Jiangxi,and Henan.From the regional perspective,the overall trend of PPP is decreasing successively from east to west.From the ‘Northern Coastal Economic Zone' perspective,the middle reaches of the Yellow River and the middle reaches of the Yangtze River have great differences on PPP.Among them,the middle reaches of the Yellow River is the main region causing great differences on price level in China.(4)In terms of measuring the gap of actual economic development between regions,we take GDP and per capita disposable income of each region in 2016 as nominal indicators(expressed in 2010 price level),and measures the real economic development gap among regions in China.According to the results,we found that the revised economic strength gap between regions and real income gap between residents are all smaller than nominal indicators.That is to say,the economic gap between regions measured by nominal indicators will be overestimated.(5)In terms of the measurement of regional poverty line,we firstly extrapolate the sub-national PPP in 2016 by using the rural CPI of each region and calculate the poverty line in 31 regions.There are 13 regions where the regional poverty line is higher than the national standard,including Shanghai,Zhejiang,Guangdong,Hainan,and Jiangsu.Shanghai has the highest income standard at 3,457.7 yuan per person per year.There are17 regions below the national poverty standard,including Gansu,Ningxia,Hebei,Jiangxi,and Henan.Henan has the lowest income standard at 2,277.3 yuan per person per year.