This note reaffirms the author's conclusion that measured price--value correlations have been tainted by the influence of industry size and are therefore spurious. 'Deflation' of sectoral prices and values by costs destroys the correlation only because the theory in question is false, as the...

This study replicates findings that sectoral prices and values are highly correlated cross-sectionally, and that deviations between them are small. Yet after controlling for variations in industry size that produce 'spurious correlation', I find no reliable evidence that relative values have any...