The law of value and laws of statistics: sectoral values and prices in the US economy, 1977-97

This study replicates findings that sectoral prices and valuesare highly correlated cross-sectionally, and that deviationsbetween them are small. Yet after controlling for variationsin industry size that produce ‘spurious correlation’,I find no reliable evidence that relative values have any influenceupon relative prices. The smallness of price–value deviationsthus does not result from such an influence; it is shown insteadto result from a lack of dispersion in the data. Values turnout to be no better predictors of prices than any other randomvariable with the same probability distribution.