The purpose of this paper is to discuss the development of the measures of capital input in current and constant prices for each of the thirty sectors in Japan for the period 1960-1979. In accordance with the methodological formulation developed in our study, the trans-log index framework is applied to accomplish the task.
Our analytical framework requires the flow of productive services provided by capital assets to be separated between quantity of the flow of services and the service (rental) price per unit of flow. If we observe the amout of capital service time utilized, say machine hours, and the rental rate per machine hour, then the measurement of sectoral capital input would be a relatively straightforward task. The markets for capital inputs, however, are asymmetric to labour markets in that the demand side (the users of capital services) and the suppli side (the suppliers of capital services) are not in general distinguishable. Particularly in Japan, evidence suggests that most capital inputs are owner-utilized. And for those markets where the distinction between the owner's capital assets and the users of capital services can be made, data on markets service prices quantity flows are only sparsely available.
The lack of explicit capital service price and quantity in the market requires a methodological framework that enable us to impute these flow variables. We can infer the level of capital input from the level of capital stock.
We shuld begin the measurement of sectoral capital input by estimating the capital stock levels of various capital assets in each sector. The methodological framework for the measurement of sectoral capital input and capital stock is discussed in Section 2. Section 3 discusses in detail the measurement procedure and the data sources for sectoral capital stocks.