This paper provides the first estimate of consumption-based purchasing power parity (PPP) converters for the 1934-36 Japan, Korea and Taiwan. We matched prices of more than 50 commodities and derived the consumption weights from various household expenditure surveys in these three countries. Based on this, we make a long-term comparison of real per capita consumptions and GDP for these three countries. We find that the 1934-6 average consumer prices of Korea and Taiwan were about 0.86 and 0.84 times of that of Japan respectively. A direct binary Korea-Taiwan comparison also shows a Korean consumer price level 1.03 times that of Taiwan. Our finding contrasts sharply with the implicit GDP deflator used in Maddison's estimate (1995) that ended up assigning Korea a lower price level than that in Taiwan. Accordingly, our finding that Taiwan's real per capita consumption was higher than in Korea, also contradicts Maddison's result that showed Korea as having a higher real per GDP than Taiwan in the Pre-War era. We argue that our new pre-War benchmark PPP estimate more accurately reflects the relative riches of these two countries at the time. It is likely that Maddison's result, based on a backward projection of real GDP from a post-War benchmark PPP converter, neglected long-term changes in terms of trade thus leading to estimation biases.
