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Abstract

Vol. 53, No. 4, pp. 337-347 (2002)

“On Cross-sectional Comparison of Consumer Prices -A Note on the Formulation of the Regional Difference Indexes of Consumer Prices-”
Takashi Unayama (Department of Policy Management, Keio University)

The Regional Difference Index of Consumer Prices (RDI), which is available in the "Reports on the National Survey of Prices" (Statistical Bureau of Japan), is a consumer price index for cross-sectional price comparison. RDI adopts a system of comparison in which the average price of all regions is used as the reference. However, the formulation of RDI could cause the "average value incoherency" where indices for all region are lager than the reference (that is, the average). Here, I propose an alternative formulation of RDI that can never lead to the average incoherency, and give it an economic interpretation of formula.