Five Ways to Compute the Relative Value of a Japanese Yen Amount, 1879 - 2011

GDP Deflator
Average Wage
Nominal GDP Per Capita
Real GDP Per Capita
Initial Year:  
Initial Amount:
Desired Year:

Why not 2012?

Determining the relative value of an amount of money in one year compared to another is more complicated than it seems at first. There is no single "correct" measure, and economic historians use one or more different indicators depending on the context of the question.

Most indices are measured as the price of a "bundle" of goods and services that a representative group buys or earns. Over time the bundle changes; for example, carriages are replaced with automobiles, and new goods and services are created such as cellular phones and heart transplants.

These considerations do not stop the fascination with these comparisons or even the necessity for them. For example, such comparisons may be critical to determine appropriate levels of compensation in a legal case that has been deferred. The context of the question, however, may lead to a preferable measure and that measure may not be a price deflator, which is used far too often without thought to its consequences.

Presented here are five indicators for making such comparisons in Japanese Yen between any two years from 1879 to the present. They are the CPI, the GDP deflator, the average wage, GDP per capita, and the (relative) share of GDP. Note that only the CPI is available for the entire period, with the average wage available from 1948 and the three GDP indicators available from 1952.

One or more of the indicators may be most appropriate for you depending on the nature of your query. See below for the definitions of the indicators and some examples.

You can make this computation among all the years between 1879 and the present.

Descriptions of the indicators

  • The CPI is most often used to make comparisons partly because it is the series with which people are most familiar. This series tries to compare the cost of things the average household buys such as food, housing, transportation, medical services, etc.

  • The GDP deflator is an index of all prices in the economy. It is a good measure for complex products, such as personal computers, or commodities purchased by businesses, such as machinery.

  • Average wage indicator is the average monthly contract cash earnings of regular workers in all industries.

  • The GDP per capita is an index of the economy's average output per person and is closely correlated with the average income. It can be useful in comparing different incomes over time.

  • The GDP is the market value of all goods and services produced in a year. Comparing an expenditure using this measure, tells you how much money in the comparable year would be the same percent of all output.

For the source of the data see Sources of Annual CPI, Wages, GDP, GDP Deflator, and population for Japan.

Here Are Some Examples

Price of rice: For many centuries rice has been the most common foodstuff of the Japanese people. In 1892 the price of rice was ¥0.67 per kilo (2.2 pounds). Rice is a standardized commodity of considerable importance in household expenditure. Therefore the CPI is the logical indicator. Using the CPI, the relative value of a kilo of rice was ¥1530 in 2009. We emphasize that ¥1530 is not the price of a kilo of rice in 2009. Rather, it is the year-2009 relative value of the year-1892 kilo of rice.

Box-Office of First Godzilla Film: One of the most popular science-fiction film series of all time is the Godzilla films. The original film, released in 1954, has given rise to 27 successor films, by one count ( The film grossed ¥152 million. It is best considered as a project, which suggests GDP as the indicator. The box-office amount has year-2009 relative value of ¥11.3 billion.

Sadaharu Oh's Salary: Sadaharu Oh, who played baseball for the Yomiuri Giants, is the home-run champion of professional baseball. His career total of 868 home runs exceeds that of any of the American present and former home-run champions. In 1976, four years before he retired, Oh's salary was ¥52.6 million. All five indicators can have meaning, depending on context.

If the context is Oh's purchasing power of household commodities or of all commodities, then the CPI or GDP deflator is the right indicator, and the 2009 relative-value of Oh's 1976 salary is ¥86.5 million or ¥70.7 million, respectively.

Suppose the context is economic status. This suggests the average wage or per-capita GDP as the indicator. Oh's 2009 relative value becomes ¥114.7 million or ¥132 million respectively. Finally, to measure Oh's "economic power", one should use the share of GDP as the indicator or¥184 million yen.


Lawrence H. Officer and Samuel H. Williamson, "Five Ways to Compute the Relative Value of a Japanese Yen Amount, 1879 - Present," MeasuringWorth, 2012.


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