【Notes】

Relative Importance of Tradable andNontradable Prices within Japan
日本国内物価水準における財とサービスの重要性
IKENO Hidehiro
池 野 秀 弘ABSTRACTThis paper examines empirically the importance of tradables and nontradables indetermining Japanese local price levels. The traditional theory claims the pricedichotomy of tradables and nontradables; the relative price level across areas isdetermined exclusively by nontradables. Tradables and nontradables are represented bygoods and services, respectively. First, series of local price indexes of tradables andnontradables are compiled from published disaggregated CPIs for 47 cities in Japan.
Then, the extent to which changes in relative price levels across cities are affected bytradable and nontradable facors is examined. Results show that relative price levels
across cities are not dominated by the nontradable factor. Both the tradable andnontradable factors are important in determining changes in relative price levels acrosscities within Japan. The dichotomy of goods and services as final products fails even
within a single country.
This research is supported by the joint research program fund provided by the
Research Institute of Commerce of the College of Commerce, Nihon University, from2017 to 2019.
1. Aim and background
This paper examines empirically the importance of tradables and nontradables indetermining Japanese local price levels. Tradables are represented by goods, andnontradables are represented by services. Results show that changes in relative pricelevels across Japanese cities are not dominated by nontradables. Both tradables andnontradables are important in determining changes in relative price levels across the cities.
In the traditional model of international economics, the relative price level acrosscountries is determined by nontradables, since the price levels of tradables are notregarded as differing between countries provided that trade is free. The traditional theory
asserts a price dichotomy between tradables and nontradables because the price of
tradables is determined globally and the price of nontradables is locally determined. The
relative price level across countries is therefore determined exclusively by nontradables.

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『商学研究』第36号

Application of the same concept to different areas within a single country indicates that
relative price levels across areas should be explained mainly by the prices of nontradables.
If local markets within a single country are well integrated with each other, which is areasonable assumption in countries with an advanced economic system, tradables are
subject to the Law of One Price, and changes in relative price levels should be due entirely
to changes in the prices of nontradables. This paper investigates these questions
empirically.
In the area of international economics, there have been many empirical studies which
decompose changes in the real exchange rate into tradable and nontradable components.
The real exchange rate here is a synonym for the relative price level across countries.
Engel (1999) measures empirically the importance of the price of nontradables inchanges in US real exchange rates, and concludes that changes are dominated by changes
in the prices of tradables. He asserts that changes in the prices of nontradables scarcely
explain changes in real exchange rates, even in the long run. Because his results are instark contrast with traditional norm of economics and its significant impact, numerous
papers followed his study. The methodology used in his study has been adopted in manystudies in the area, including Mendoza (2000), Burstein et al. (2005), Betts and Kehoe(2006 and 2008), Morales-Zumaqueros (2006), Ciplak (2007), Parsley (2007), Basche etal. (2009), and Parsley and Popper (2010).
Parsley (2007) examines the US real exchange rates against East Asian currencies,and concludes that the prices of nontradables explain almost none of the movements inreal exchange rates.
Mendoza (2000) concludes that the relation between the real exchange rate andnontradables depends on the exchange rate system, based on examination of the realexchange rate between the US dollar and the Mexican peso. He asserts that the relationis stronger under a managed exchange rate system than under an exchange rate systemwith no explicit management policy. Betts and Kehoe (2008) claim that a stable realexchange rate leads to a strong relation, based on the real exchange rates among fifty
countries. Morales-Zumaqueros (2006) and Ciplak (2007) assert that the importance of
nontradables in determining real exchange rates changes over time.
Burstein et al. (2006) conclude that changes in the relative price of tradables andnontradables account for roughly 50% of cyclical movements in the real exchange rates;
they look at OECD countries, examining import and export price indexes as well as theconsumer price index (CPI). Betts and Kehoe (2006 and 2008) assert that the relation
between the real exchange rate and nontradables depends on the choice of price index
series and, also, on the choice of trade partners. They also assert that the relation isstrong when the trade relationship between the two countries is intensive.
Parsley and Popper (2010) methodologically follow Engel (1999), but they takeaccount of distinction between tradables and nontradables as inputs. Empirically, they take
imports as tradable inputs, and conclude that the deviation of the law of one price in inputs
contributes little in explaining change in the real exchange rate between the US and Japan.
『商学研究』第36号

̿ 32 ̿

Crucini and Landry (2011) use a methodology, which is different from the one
initiated by Engel (1999), to study the same issue. They decompose the variance of therelative general price level into a portion attributed to the relative price of tradables and a
portion attributed to the relative price of nontradables, assuming the same set of weights of
tradables and nontradables in the general price index for all areas. They use goods andservices to represent tradables and nontradables, respectively. They assert that thedichotomy of price levels of goods and services as final products fails, i.e., the relative
price level is not exclusively attributed to service.1)
Previous empirical studies of real exchange rates across countries suggest thatchanges in relative price levels across areas within a single country should be determined
mainly by changes in the prices of nontradables as follows:(1) The relative price level across different areas within a single country can beinterpreted as the real exchange rate between different areas under a fixed exchange
rate system which sets the nominal exchange rate always equal to one. Based on thefindings of Mendoza (2000) and Betts and Kehoe (2008), it should make the relation
between the real exchange rate and nontradables strong.
(2) Trades between different areas within a single country are usually regarded as more
intensive than those across an international border. Betts and Kehoe (2006 and2008) claim that a tight trading relationship causes a strong relation between
nontradables and the real exchange rate. The relation between nontradables andrelative price levels across areas should therefore be strong within a single country.
However, the results in this paper indicate that changes in relative price levels acrosscitites within Japan are strongly affected not only by changes in the prices of nontradables,
which are represented by the price of services, but also by those of tradables, which are
represented by those of goods.
The logic of Engel (1999) has only rarely been applied to regional economies within
a single country in empirical studies. Chen et al. (2006) is one of the few applications ofEngel’s methodology to regional economies within a single country, investigating relative
price levels across US major regions and also cities. They examine how relative pricelevels across areas within the US are affected by tradable and nontradable factors. They
claim that, if the entire contiguous US is partitioned into four major regions, nontradables
play a central role in explaining changes in relative price levels across regions. They
claim, however, that tradables are also important in explaining changes in relative pricelevels across cities. The present paper applies Engel’s methodology and examines therelative importance of nontradables in determining Japanese local price levels.
The relative influence of tradables and nontradables on local price levels within asingle country hinges on the extent of integration of domestic local markets. The
traditional assumption is that markets of tradables are integrated, and markets of
nontradables are segmented. In that case, then differences among local price levels aredue exclusively to nontradables. Empirical studies show that integration of markets of
tradables is not guaranteed even within a single country, however. For example, Ikeno
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『商学研究』第36号

(2014) shows that inter-city convergence of price indexes, many of which are exclusively
based on tradables, is limited within Japan.
2. DataThis paper uses the price index of goods as the price index of tradables, and the priceindex of services as the price index of nontradables. The Japanese Statistics Bureau(JSB) publishes monthly the national general and disaggregate CPIs, and the general anddisaggregate CPIs for all 47 Japanese prefecture capitals. It also publishes the national
CPIs of goods and services separately. It does not publish local CPIs of goods andservices separately, however. In this paper, local series of price indexes of goods andservices are compiled monthly for the period 1985:01-2016:12 from the published local
disaggregate CPIs, using the national CPI weights of 2000. The base year of CPI
weights 2000 is chosen because it is essentially the mid-point of the sample period.
The JSB classifies all items covered by the general CPI into 47 groups, and publishes
their monthly local price indexes. Based on the definition of goods and services used by
the JSB, these 47 groups are classified below into goods and services. Details of theclassification are given in the appendix.
ܰ
்
ே
ܰ
ܶ
ܲ݅,‫ݐ‬The local price indexes of tradables and nontradables, denoted as ܲ݅,‫ݐ‬
௧ and ‫݌‬௧ arecalculated as follows;
௚

்
௠
ܲ௜,௧
= (σ௠
௚ୀଵ w௚ × ‫ܫܲܥ‬௜,௧ )/ σ௚ୀଵ w௚ ,

and
௦
ே
ܲ௜,௧
= (σ௡௦ୀଵ w௦ × ‫ܫܲܥ‬௜,௧)/ σ௡௦ୀଵ w௦

where w௚ is the national weight of price index ݃ classified as goods, w௦ is the௚௦
national weight of price index ‫ ݏ‬classified as services, and ‫ܫܲܥ‬௜,௧ and ‫݅ܫܲܥ‬௜,௧
are their
local price index in capital city ݅. The coefficients w௚ and w௦ represent weights used
for compilation of the national CPI in 2000.
For the general price ܲ௜,௧ , the following index is used in place of the original
numbers published by the JSB, so as to be consistent with the tradable and nontradable
price indexes calculated in this paper:
௚

௦
௡
௠
௡
ܲ௜,௧ = (σ௠௚ୀଵ w௚ × ‫ܫܲܥ‬௜,௧ + σ௦ୀଵ w௦ × ‫ܫܲܥ‬௜,௧ )/(σ௚ୀଵ w௚ + σ௦ୀଵ w௦ ) .

In the following analysis, the logarithms of the tradable, nontradable and generalprice indexes are used, such that்்‫݌‬௜,௧‫ ؠ‬log (ܲ௜,௧) ,ேே‫݌‬௜,௧ ‫ ؠ‬log (ܲ௜,௧) , and‫݌‬௜,௧ ‫ ؠ‬log (ܲ௜,௧ ) .

3. Methodology
The paper uses two types of measure to estimate the extent of effects of nontradable
prices on the general prices. One follows the methodology in Engel (1999), and the other『商学研究』第36号

̿ 34 ̿

follows that of Chen et. (2004). Both separate the movement in the general price level into
tradable and nontradable parts.
3-1 The Engel measure
The general price index of the ݅’th area in period ‫ ݐ‬in log, ‫݌‬௜,௧ , is given by thefollowing Equation, where ߙ is the share of nontradables in the general price index:்ே 2)‫݌‬௜,௧ = (1 െ ߙ)‫݌‬௜,௧+ ߙ‫݌‬௜,௧
.

The relative general price level across areas ݅ and ݆ in period ‫ ݐ‬is denoted by ‫ݍ‬௜௝,௧
and is defined as:‫ݍ‬௜௝,௧ = ‫݌‬௜,௧ െ ‫݌‬௝,௧ .

The relative general price level can therefore be written as‫ݍ‬௜௝,௧ = ‫ݔ‬௜௝,௧ + ‫ݕ‬௜௝,௧

whereܶ
‫ ݆݅ݔ‬,‫݅݌ = ݐ‬,‫ݐ‬െ ‫݆ܶ݌‬,‫ݐ‬ܰܶ‫ ݆݅ݕ‬,‫ߙ = ݐ‬൫‫݅݌‬,‫ݐ‬െ ‫݅݌‬,‫ݐ‬൯ െ ߙ൫‫݆ܰ݌‬,‫ ݐ‬െ ‫݆ܶ݌‬,‫ ݐ‬൯ .

Here, ‫ݔ‬௜௝,௧ is the relative price of tradables, and ‫ݕ‬௜௝,௧ is the ratio of
nontradable-tradable relative prices. If the two local markets of tradables are integrated,then tradables are arbitraged and ‫ݔ‬௜௝,௧ is zero, implying that changes in the generalprice, ‫ݍ‬௜௝,௧ , between two areas come entirely from ‫ݕ‬௜௝,௧ .
Engel (1999) formulates the following measure;‫ܤ‬௜௝ (݇) = ‫ܧܵܯ‬൫‫ݔ‬௜௝,௧ െ ‫ݔ‬௜௝,௧ି௞ ൯Τ( ‫ܧܵܯ‬൫‫ݔ‬௜௝,௧ െ ‫ݔ‬௜௝,௧ି௞ ൯ + ‫ܧܵܯ‬൫‫ݕ‬௜௝,௧ െ ‫ݕ‬௜௝,௧ି௞ ൯) ,where the mean squared error, ‫ܧܵܯ‬, is defined as‫ܽ(ܧܵܯ‬௧ െ ܽ௧ି௞ ) ‫ؠ‬ଵ௡ି௞σ௡௧ୀ௞ାଵ(ܽ௧ െ ܽ௧ି௞ )ଶ

.

Here, ‫ܤ‬௜௝ (݇) is interpreted as the proportion of the contribution of tradables in thechange of the general price level over ݇ periods. It is defined by allocating thecovariance of the two factors to fluctuations in ‫ݕ‬௜௝ in proportion to the relative size of its
variance. If tradable markets are perfectly integrated, ‫ )݇(ܤ‬should be zero for all ݇.
It is reasonable to assume that arbitrage needs some time and cost to occur, due
presumably to transportation costs and other transaction costs. Then, ‫ܤ‬௜,௝ (݇) is
expected to decrease over ݇.
3-2 The Chen-Choi-Devereux (CCD) measures
Chen et al. (2004) define the following measure;ܸ௜௝ = (‫ݎܽݒ‬൫‫ݓ‬௜௝ ൯ + ܿ‫ݒ݋‬൫‫ݓ‬௜௝ , ‫ݖ‬௜௝ ൯)ൗ‫ݍ(ݎܽݒ‬௜௝ )where ‫ݓ‬௜௝ = ߙ(‫݌‬௜ே െ ‫݌‬௝ே ), and ‫ݖ‬௜௝ = (1 െ ߙ)(‫݌‬௜் െ ‫݌‬௝் ). This measure corresponds tothe proportion of the contribution of nontradables in the variance of the relative generalprice under the assumption that the covariance of these two factors is equally allocated to
the factors. If the markets of tradables are perfectly integrated, the variance of therelative general price comes wholly from the variance of the relative price of nontradables,̿ 35 ̿

『商学研究』第36号

implying that ܸ௜௝ should be equal to unity.
4. Empirical results of the two measures
4-1 The Engel measures

Table 1 reports averages, maximums, minimums, and variances of the Engelmeasures. The start of the period is ݇ months after 1985:01. The end is in 2016:12.
The number of samples is equal to 47×46/2=1081 since there are 47 prefecture capitals inJapan. Figure 1 depicts the same results graphically. The averages indicate that the
movements of the relative general price levels between capital cities is due mainly to the
tradable factors. The nontradable factors explain a small portion of intercity pricedifferences even over several years. The proportion due to tradables decreases over time
as expected, but it still remains dominant even over years. It is remarkable that themeasure still exceeds 0.8 even after 72 months. This is contrary to the notion of
integrated Japanese local markets of tradables.
The minimum of the Engle measures substantially decreases as ݇ increases. It
means as follows: the difference in the regional general price levels is due exclusively tothe tradable factors over a short periods, but there are some cases where the difference inthe regional general price levels is due dominantly to the nontradable factors over a long
periods. This result suggests that arbitrage of tradables is not carried out instantaneously
and it needs a substantial time. On the other hand, the maximum does substantiallychange even when ݇ increases. It suggests that arbitrage of tradables fails to work evenin a long run in some cases.
Table 1. The Engel measures
k

1

6

12

24

36

48

60

72

average

0.831

0.818

0.812

0.806

0.806

0.805

0.803

0.804

max

0.887

0.893

0.900

0.921

0.934

0.935

0.937

0.951

min

0.736

0.669

0.615

0.520

0.488

0.427

0.372

0.320

var

0.001

0.001

0.002

0.004

0.005

0.007

0.009

0.010

『商学研究』第36号

̿ 36 ̿

Figure 1. Averages of the Engel measures
0.835
0.830
0.825
0.820
0.815
0.810
0.805
0.800
0.795
0.790
0.785
1 month 6 months 12 months24 months36 months48 months60 months72 months

4-2 The CCD measure

Table 2 reports descriptive statistics of the CCD measures over various sample
periods. The number of samples is equal to that of the Engel measures, i.e., 1081. The
results indicate that the nontradable factors explain a small fraction of the intercity pricevariances for all periods. Inflation rates changed drastically over the whole sample
period 1985:01 to 2016:12. Hence, the measure is calculated over various subsample
periods. The averages indicate the measure does not substantially change over different
subsample periods. The variance of the intercity general prices derive mostly from thevariance of the intercity relative tradable prices. Although this is again contrary to thenotion of the integration of local tradable markets in Japan, the results are consistent withthose from the Engel measures.
Table 2. CCD measuresstart

1985:01

1985:01

2000:01

1985:01

1995:01

2005:01end

2016:12

1999:12

2016:12

1994:12

2004:12

2016:12average

0.200

0.271

0.199

0.261

0.241

0.282

max

3.591

5.120

1.988

4.350

2.393

1.486

min

-0.392-0.299-0.616-0.312-0.403-0.714

var

0.150

0.168

0.099

0.160

0.148

0.087

periods

̿ 37 ̿

『商学研究』第36号

4-3 Effects of intercity distances

Suppose that arbitrage of tradables between local markets is subject to transaction
costs, and suppose also that nontradables are not arbitraged between local markets, due totheir immobility.
If transaction costs are typified by transportation costs andconsequently increase with the distance between the two markets, the difference in pricesof tradables remains more as the two markets are further from each other. The effects ofprices of tradables on the intercity relative general prices increase, and the effects of
nontradables decrease, as the distance between two cities increases. This hypothesis istested using the Engel measures and the CCD measures.
The following equations are estimated by the OLS across the pairs of cities:‫ן= ݆݅)݇(ܤ‬0 +‫ן‬1 ‫݆݅ܶܵܫܦ‬, and

ܸ݆݅ = ߚ0 + ߚ1 ‫ ݆݅ܶܵܫܦ‬,where ‫)݇(ܤ‬௜௝ is the Engel measure for the pair of cities ݅ and ݆, ܸ௜௝ is the CCD
measure for the pair of cities ݅ and ݆, and ‫ܶܵܫܦ‬௜௝ is the logarithm of the distance
between cities ݅ and ݆ in kilometers. Of the coefficients, if arbitrage of tradables works,‫ן‬ଵ is expected to be negative, and ߚଵ is expected to be positive. The number ofsamples is equal to 1081.
Table 3 reports the results from the Engel measures. Since arbitrage of tradables isfound to take a substantial time, the results are shown for ݇ ൒ 24. The results indicate
that, although the sign of the distance is always negative as expected, the distance issignificant for ݇ ൒ 60 at the conventional significance level. This is interpreted tomean that arbitrage of tradables takes a long time to work in the way expected. In a
short-run, arbitrage of tradables works only a little.
Table 4 reports the results from the CCD measures. The distance is either
significantly positive or insignificantly negative, in accordance with expectation. The
distance is insignificant for periods starting after the mid-1990s, when the Japanese
economy has been marked by continuous weak deflation. Inflation rates fell within avery limited range. A possible reason for these results is that most of the explanatory
variables, namely the intercity differences in prices, are distributed within a very narrow
range around zero, and it does not lead to the expected results.
Table 3. The Engel measures and distanceskconstant‫ܶܵܫܦ‬௜௝
ܴଶ

24

36

48

60

72

0.807
(54.191)
0.000(-0.061)-0.0010.817(49.023)-0.002(-0.654)-0.001

0.834(43.496)-0.005(-1.563)
0.001

0.845
(39.708)-0.007(-1.980)
0.003

0.861
(37.154)-0.010(-2.492)
0.005

Note: t-values in parentheses.

『商学研究』第36号

̿ 38 ̿

Table 4. CCD measures and distances
periods

start

1985:01

1985:01

2000:01

1985:01

1995:01

2005:01end

2016:12

1999:12

2016:12

1994:12

2004:12

2016:12constant‫ܶܵܫܦ‬௜௝
ܴଶ

0.008

0.019

0.306

0.011

0.262

0.347

(0.088)(0.199)(4.263)(0.121)(2.973)(5.155)

0.032

0.042

-0.0180.042-0.003-0.011(2.193)(2.721)(-1.497)(2.772)(-0.240)(-0.980)

0.004

0.006

0.001

0.006

0.000

0.000

Note: t-values in parentheses.

5. Conclusion
The Engel measures and the CCD measures both indicate that the intercity pricedifference comes from tradables rather than nontradables. This result is consistent withthose from empirics of international price differences, such as Engle (1999) and mostsubsequent studies. Chen et al. (2006) claim that a long time is necessary for the effectsof tradables on the inter-regional difference in the general price level in the US to become
substantial. The results from the empirics in the present paper are also in accordancewith these results. These results are not consistent with the traditional ideas expressed asfollows, even after allowing substantial adjustment time: “Japanese local markets are wellconnected with each other, and hence integrated. Transportation of tradables isspontaneous and the prices of tradables rarely differ from each other, while local markets
of nontradables are segmented due to their immobility”.
These observations undermine the traditional idea that nontradables dominate change
in the relative price level across areas. They are in contrast to what are suggested by the
results in Mendoza (2000) and Betts and Kehoe (2006 and 2008), and are consistent withthe results about US cities in Chen et al. (2004).
Given the idea that local markets of goods are well integrated within Japan, theresults are surprising. The results suggest failure of the price dichotomy of goods andservices as final products within Japan. This paper show that failure of the pricedichotomy, which Crucini and Landry (2011) show using cities located acrossinternational borders, holds even within a single country.
Note that analyses in thispaper depend on the CPI and, hence, the price indexes compiled in this paper are based on
prices of final products.
The results in this paper have two possible interpretations. One is that arbitrage
between local markets of goods is not perfect within Japan, because of economic factors
such as transportation costs and local monopolies. The other is that goods are notsufficiently tradable. The latter casts doubt on the usefulness of distinguishing goods andservices from the point of view of the price index.
Atkeson and Burstein (2008) theoretically analyze economic factors causing violation

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『商学研究』第36号

of the PPP for tradable goods in the framework of a two-country model. They conclude
that transaction costs of international trade and imperfect competition, which leads topricing-to-market, are essential for the deviation from the PPP. Their results suggest thattransportation costs between areas and local monopoly in each area should be responsiblefor differing prices of tradable goods between areas within a single country. Basche et al.
(2009) stress the importance of costs which are attributed to the distribution process,which are understood to affect retail prices of final goods.3)
On the other hand, the results from the within-region analysis in this paper indicatethat an introduction of simple transportation costs, such as those which are assumed to be
simply correlated with geographical distances, cannot be an answer to the issue.
The difficulty in distinguishing between tradability and non-tradability is
troublesome. As pointed out in the literature, retail prices of final goods involve not only
tradable components but also nontradable components such as marketing service.4) Of
course, the Japanese CPIs reflect such nontradable components in the prices of goods.
Crucini and Landry (2011) recently combine price analysis and input-output analysis toinvestigate effects of nontradable inputs in goods. Parsley and Popper (2010) stress
importance of distinction between tradables and nontradables as inputs, rather than as final
products. An extension of the current study towards such direction will be useful.5)
Appendix: Classification of goods and services
The Japanese Statistical Bureau classifies all items covered by the general CPI as
goods or services. This classification matches fairly closely, but not completely, theclassification of all items into the 47 groups whose each local price index are publishedmonthly.
A total of 34 groups are classified as goods in this paper, as follows; (1) cereals, (2)fish and shellfish, (3) meat, (4) dairy products and eggs, (5) vegetables and seaweeds, (6)fruits, (7) oils, fats and seasonings, (8) cakes and candies, (9) cooked foods, (10)beverages, (11) alcoholic beverages, (12) electricity, (13) gas, (14) other fuel and light,(15) water and sewage charges, (16) household durables, (17) interior furnishings, (18)
bedding, (19) domestic utensils, (20) domestic non-durables, (21) clothes, (22) shirts,
sweaters, and underwear, (23) footwear, (24) other clothing, (25) medicines and healthfortifications, (26) medical supplies and appliances, (27) private transportation, (28)textbooks and reference books for study, (29) recreational durables, (30) recreational
goods, (31) books and other reading materials, (32) toilet articles, (33) personal effects,and (34) cigarettes.
A total of 13 groups are classified as services, as follows: (1) eating out, (2) rent, (3)repairs and maintenance, (4) domestic services, (5) services related to clothing, (6)medical services, (7) public transportation, (8) communication, (9) school fees, (10)tutorial fees, (11) recreational services, (12) personal care services, and (13) others.
All but four groups contain items of either only goods or only services, based on the『商学研究』第36号

̿ 40 ̿

Japan Statistical Bureau’s definition. These four groups are: water and sewage charges;
private transportation; recreational durables; and personal effects. These four groups areclassified as either goods or services in compiling the data in this paper, depending on
which of goods and services share more in compilation of the national CPI. The effectsof the mixture of goods and services in these groups are not considered to be critical in thedata compilation. The weights of these groups in the general CPI are not large, andeither goods or services overwhelm the other in these groups on the basis of the national
CPI. The detailed weights of each item are not published for all local CPIs, althoughdetailed weights of each item are published for the national CPI. Based on weights inthe national CPI, the weights of services in the price index of goods that is defined in thispaper is 7.3%, and the weights of goods in the price index of services defined in this paperis 1.8%.
Notes
1㸧 They, further, assert that the dichotomy holds when tradability of intermediate
inputs are taken into account.
2㸧 The general price levels used for empirics in this paper are compiled as thearithmetic means as indicated above. However, the numerical differences between
arithmetic and geometric means are small with the data used in this paper.
3㸧 Their results indicate that the difference between final retail prices and prices
at-the-dock explain most fluctuations in the US real exchange rate.
4㸧 For example, see Crucini et al. (2005).
5㸧 The methodology in Crucini and Landry(2011) cannot be directly applied to thestudy in this paper because of some restrictive assumptions used in their paper.
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要旨
この論文は、日本の地域物価水準の決定において、地域間取引可能な財と地域間取引不可能なサービスの相対的重要性を実証的に検証する。 伝統的な経済理論は、取引可能な財と取引不可能なサービスの価格に関する二分法を主張している。地域間の相対物価水準は、
地域間取引不可能なサービスによって決定されると考えられている。まず、47都道府県所
在地について公表されている日本のCPIから、財とサービスの物価水準のデータを作成する。 次に、都市間での相対物価水準の変化が、財とサービスによってどの程度影響を受けているかを調べる。結果は、都市間の相対物価水準は、取引不可能なサービスの要因によって決まっているわけではないことを示している。地域間取引可能な財と取引不可能なサー
ビスの両方が、日本国内の都市間の相対的な物価水準の変化において大きな比重を占めている。物価水準の決定における財とサービスの二分法は日本国内で成り立たないことを結果は示している。

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