The Evaluation of the Subsidy Program for Residential Construction Using Local Timber Built Outside the Prefecture

Abstract

Since the national government doesn't provide preferential treatment to domestic timber due to agreement with the World Trade Organization, the prefectural governments take up the role by prefectural policies. The government of each prefecture implemented the subsidy programs for residential construction which is a major demand for timber; while Akita, Gifu, and Nara prefectures implemented these subsidy programs not only for their citizens but also for house owners outside the prefecture. It is important to promote local timber usage outside the prefecture from the viewpoint of expanding sales channels. On the other hand, it is necessary to gain an understanding by the local citizens and their council because this subsidy program causes an outflow of budgets. For this purpose, it is necessary to evaluate the benefits of these systems for the prefectures. This study evaluated the economic impacts of the subsidy programs on the citizens outside the prefectures and investigated their attitude toward the program. It was found that the rate of induced production-values per payment for timber products of Akita, Gifu, and Nara prefectures was 1.44, 1.47, and 1.37, respectively. The rate of induced gross-value-added per budget of each prefecture was 4.88, 8.85, and 6.70, respectively. Induced tax-effect per budget of each prefecture was 0.129, 0.345, and 0.255, respectively. According to the results of the questionnaire survey conducted for house owners, it is evident that the subsidy program of Nara increased the demand for local timber. Hence, it can be concluded that the subsidy for residential construction outside the prefecture is valid.