Living in Spain’s most expensive region, Madrid, costs 43% more than in its cheapest, Extremadura, according to a study presented by Jaume García, former head of the 
National Statistics Institute and now a professor at Catalonia’s Pompeu Fabra University.
What’s more, the study, which was commissioned by the Catalan regional government, shows that taking the cost of living into account reduces the disparities in income among the regions.
Without applying any kind of correction, the Basque Country is the Spanish region with the highest GDP per inhabitant (€30,051), while Extremadura has the lowest (€15,133) – a difference of 98%, almost double.
After taking the cost of living into account, the Basque Country remains the region with the highest per capita income (€27,895), but Andalusia moves into last place with €18,058. At the same time, the difference between the top and bottom regions drops from 98% to 54%, according to the report.
The study uses data from 2012 to calculate the purchasing power parity (PPP) of Spain’s different regions – a measure that allows the analysis of an economy’s level of production or wellbeing, cost of living, and poverty while leaving out such factors as variations in prices.
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