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Japan's Prefectural-Level KLEMS: Productivity Comparisons and Service Price Differences

Author

Listed:
  • Joji Tokui
  • Takeshi Mizuta

Abstract

We compile a prefectural-level KLEMS database for Japan and conduct productivity comparisons for Japanese 47 prefectures. One of the difficulties in compiling regional KLEMS database is how to handle variation in service prices across regions. To cope with this problem, we estimated cross-regional pricelevel differences in each industry in the service sector based on prefectural-level item-wise data of service prices. For estimation, we applied the Country-ProductDummy (CPD) method, a method used to estimate absolute purchasing power parities among countries. As a result of re-calculation, the standard deviation of cross-regional TFP difference indices in 2009 decreased by around 13 per cent. In addition, by using the derived cross-regional price difference indices, we confirmed that the Balassa-Samuelson effect, which holds among international economies, also holds among regional economies in Japan.

Suggested Citation

  • Joji Tokui & Takeshi Mizuta, 2019. "Japan's Prefectural-Level KLEMS: Productivity Comparisons and Service Price Differences," International Productivity Monitor, Centre for the Study of Living Standards, vol. 36, pages 142-160, Spring.
    • Handle: RePEc:sls:ipmsls:v:36:y:2019:6
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    Cited by:

    1. Dale W. Jorgenson, 2019. "Introduction," International Productivity Monitor, Centre for the Study of Living Standards, vol. 36, pages 1-6, Spring.

    More about this item

    Keywords

    Japan; Cross-Regional Price Level Differences; Country-Product Dummy; Total Factor Productivity;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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