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MEASURING THE COST OF LIVING INDEX, OUTPUT GROWTH, AND PRODUCTIVITY GROWTH IN THE RETAIL INDUSTRY: AN APPLICATION TO JAPAN
Author(s) -
Sunada Mitsuru
Publication year - 2010
Publication title -
review of income and wealth
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.024
H-Index - 57
eISSN - 1475-4991
pISSN - 0034-6586
DOI - 10.1111/j.1475-4991.2010.00423.x
Subject(s) - index (typography) , economics , productivity , quality (philosophy) , product differentiation , industrial organization , product (mathematics) , tertiary sector of the economy , econometrics , retail trade , microeconomics , macroeconomics , economy , mathematics , commerce , computer science , philosophy , geometry , epistemology , cournot competition , world wide web
This study applies a framework that enables one to estimate quality, exact cost of living (COL) indexes, and output growth for the retail industry. The framework is based on discrete choice theory, in which product differentiation and quality change are explicitly modeled. For illustration, the framework is then applied to the Japanese retail industry. The estimated quality index shows that, between 1985 and 1999, Japanese retail services quality improved, and the estimated COL index declined monotonically. Furthermore, the results from growth accounting suggest that ignoring both differentiation in the retail services market and changes in service quality may downwardly bias estimated output and productivity growth.