Abstract
The purpose of this paper is to examine the determinants of tourism budgets of prefectures of Japan by using time-series data and cross-sectional data. Firstly, based on the financial statistics analyzed in time series, the tourism budgets, particularly investment expenses, have been in the long-term decrease since 1995. Two aspects can be considered to be the factors of the decrease of investment expenses; the reduction of subsidies from the Japanese government and the slowdown in growth of the tourism market. Secondly, the analysis of the data of 2009 shows the amount of tourism budgets is influenced on the tourism demand and the source of revenue for tourism. Although the tourism budgets of the prefectures depend on the subsidies, it is essential to establish the independent funding source.
