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

Joji Tokui and Takeshi Mizuta ()

International Productivity Monitor, 2019, vol. 36, 142-160

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.

Keywords: Japan; Cross-Regional Price Level Differences; Country-Product Dummy; Total Factor Productivity (search for similar items in EconPapers)
JEL-codes: C21 F31 (search for similar items in EconPapers)
Date: 2019
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