NONTRADABLE GOODS PRICES AND PER-CAPITA INCOME - AN APPLICATION TO REGIONAL KOREAN DATA

Pooled time-series cross-sectional regional data for Korea over the pe riod 1985-1991 are used to investigate points which emerged from the U nited Nations International Comparison Project. The results, based on a regional analysis, are opposite to those of the ICP. The prices of s ervices do not increase more rapidly in fast growing than in slow grow ing regions. This regional analysis provides contradictory evidence to the widely recognized stylized fact that the prices of nontradables i ncrease with real per capita income by a larger margin than the prices of tradables increase.