Economic Effects of Multi-functionality Payment Grant for Developing Regional Economies

―Backward and income linkage effects using the 47-prefecture inter-regional Input/Output analysis―

Abstract

The multi-functionality payment grant, entitled TAMENTEKI KINOU SHIHARAI, aims to prolong the lifespan of agricultural infrastructures with participation of residents. In this activity, participants construct and repair facilities by themselves or order the repair to the construction companies. Such facility maintenance can create new services and revitalize the local economy.

This study evaluated the backward linkage and income linkage effects by using a 47-prefecture inter-regional Input/Output model and the spending content data on different types of activities. The results demonstrated that (i) the induced production and induced value-added vary in the way of doing an activity for repair, and (ii) the incidence rates of induced value added within the execution areas were about 30～32% (in the case of self-repair) and 27% (in the case of ordering to construction companies) of the grant spending.