The Penn effect within a country : evidence from Japan

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review

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Original languageEnglish
Pages (from-to)1070 - 1089
Journal / PublicationOxford Economic Papers
Volume66
Issue number4
StatePublished - 2014

Abstract

To control for product quality and exchange rate effects, we use Japanese regional data to study the Penn effect-the positive relationship between price and income levels. Comparable with the evidence from international data, the Penn effect is significant in the Japanese prefectural data and driven mainly by the prices of non-tradeables. We draw on studies of productivity and economic density to explain the positive price-income relationship and find that the empirical economic density variables explain the variability of the Japanese prefectural (relative) prices quite well.

Citation Format(s)

The Penn effect within a country : evidence from Japan. / Cheung, Yin-Wong; Fujii, Eiji.

In: Oxford Economic Papers, Vol. 66, No. 4, 2014, p. 1070 - 1089.

Research output: Journal Publications and Reviews (RGC: 21, 22, 62)21_Publication in refereed journalNot applicablepeer-review