HAGERSTOWN, Md. – Judy Raysely, a lifelong resident of this city of 38,000, shops only in its downtown. She said she prefers the specialty stores, even though prices for some items are higher than she might find in malls and outlet stores in the D.C. suburbs or nearby Pennsylvania.
Denise Klinefelter, who works in Hagerstown but lives 50 miles away in Great Cacapon, W.Va., said she finds bargains more easily when traveling between work and home. “The further east you go, as far as Baltimore County, the more expensive you get,” she said.
Shoppers aren’t the only ones who have opinions about regional differences when it comes to the cost of clothing, home furnishings and other items.
Economists and urban planners are haggling like bargain hunters at a bazaar over whether or not to include the price of goods and services in Hagerstown with those in the Washington-Baltimore area when calculating the consumer price index.
The index is used to determine increases in wages and salaries, Social Security and other government benefits and even alimony payments.
Usually, the CPI “is something only an economist can get excited about,” said Elizabeth B. Davison, a Montgomery County planner who represents County Executive Douglas Duncan on the Metropolitan Washington Council of Governments.
But COG planners became interested in the index this summer when the Bureau of Labor Statistics recommended including price changes in Hagerstown with those in Baltimore and Washington in its monthly index calculations, beginning in 1999.
The COG board voted Sept. 13 to ask the bureau to halt its plans.
Davison said COG members are concerned that mixing price increases in goods and services in Hagerstown with those in the Washington-Baltimore area could work in favor of Hagerstown residents and against those in the larger metropolitan area.
They argue it could accelerate increases in wages and other payments to levels higher than the true cost of goods and services in Hagerstown, Davison said.
Combining Hagerstown’s lower prices with those in the Washington-Baltimore area would drag down increases in wages and other payments in the larger metropolitan area to levels below the real cost of goods and services, Davison said.
The result would be a “windfall to people in rural areas,” Davison said.
But Patrick Jackman, an economist at the Bureau of Labor Statistics, said Washington-area planners are overestimating how much Hagerstown will affect the equation.
Because Hagerstown’s population is a small portion of the metropolitan area’s 7 million residents, its weight in a CPI calculation is less than what Washington planners assume, he said.
In addition, Washington-area planners are overestimating price differences between Hagerstown and the Washington-Baltimore area, Jackman said.
That was “the whole point” of the decision by federal officials in 1993 to expand a D.C. statistical area that before the 1990 census included only the District, its immediate Maryland and Virginia suburbs and a few close-in counties, he said.
The new statistical area, used for regional planning, includes Baltimore and its surrounding counties, Virginia counties further west and south, Washington County in western Maryland and Berkeley and Jefferson counties in West Virginia.
The trend toward integration in the region’s economy will only get stronger, Jackman said. “It’s going to be more and more unified here,” he said.
The likelihood the Bureau of Labor Statistics will agree to the COG planners’ request to halt the new price calculation is “very slim,” said Jackman.
Labor Commissioner Katharine G. Abraham will make the decision after she formally receives the request from COG, Jackman said. -30-