Abstract

Gross domestic product (GDP) is a very popular indicator that serves for measurement and comparison of economic performance. International comparison is usually based on GDP per capita in Purchasing Power Standard (PPS) eliminating different populations and price levels. GDP in national currency is revaluated to PPS using Purchasing Power Parity (PPP) that expresses an overall country price level. When we move to lower territorial level and want to compare regions in one country, we often face the problem of lack of data, as there are no regional PPPs (RPPPs) available.
This paper performs experimental computations in order to estimate RPPPs for 14 Czech NUTS 3 regions in the year 2020. Expenditure method of regional GDP with all its four components is estimated as well.
Czech Statistical Office provides data for regional GDP in current prices for NUTS 2 and NUTS 3 regions based mainly on production approach to GDP estimate. The expenditure approach is not applied in official regional accounts statistics in Czechia at all. Using GDP adjusted with RPPPs can better show the real level of economic performance of regions instead of nominal values that are published by the official statistics. This may contribute to more suitable assessment of regional convergence or divergence and application of more proper regional policy decisions. We experience the typical situation that after applying of regional price levels there are much lower differences among regions and the region covering the capital city does not have such a high performance as could be assessed or perceived from nominal values.