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Study on Regional Differences

In their new study "Regional Differences in Purchase Power: Prices, Wages, Salaries and Pensions" Matěj Bajgar and Petr Janský demonstrate how the relative value of average real wages in the Czech Republic is significantly affected by the differences in regional price levels. For instance, Prague residetns may seem relativrely well-off at first sight, however after taking into account the price level of certain services and googds, people living in Prague can afford virtually as much as the inhabitants of other regions.

• Nominal salaries in the private sector may be 43% higher than the national average, but a half of such apparent difference is due to the educated and professional composition of the Prague workforce and the other half is ballanced out by higher price levels in Prague. Therefore, workers in Prague make in real terms the same amount of money as an average equivalent worker in the rest of the country.

• Besides Prague, the highest salaries in the private sector are found in the Central Bohemia region, while the lowest are in the Karlovy Vary and Zlín regions. Moreover, if we account for the educational qualifications and other characteristics of the regions' workers, the highest private sector salaries are in the Central Bohemia, Ústí and Plzeň regions, and the lowest in the Zlín and South Moravia regions.

For more information, please read the summary.