Nominal vs. Real Regional Income Disparities in Selected Cities of the Czech Republic

The paper brings first results of appliead research related to the measurement of the real regional disparities in the Czech Republic. The research hypothesis claims that the level of nominal income of regional inhabitants is compensated for by the level of costs of living. Therefore, it is highly inaccurate to consider socio-economic situation of the region's population by comparison of nominal income variables such as net disposable household income (NDHI) without taking the interregional price differences into account The paper briefly outlines the methodology for the construction of spatial cost-of-living index (CoLI) based on the adjusted consumer basket for consumer price index. Authors then estimate the values of NDHI on the level of district cities (since the data is available on the level of NUTS3 only). These two indicators enable verification of research hypothesis. The results correspond to the fact that the disparities in real incomes are lower than those in the nominal incomes. Therefore, assesing the real regional social-economic disparities yields more accurate results about the social-economic position of regions which is a crucial finding especially for the process of creation and implementation of economic, social, and cohesion policies.