An Analysis of the Factors that Form Differentials of Per Capita Distributed Income in Three Major Metropolitan Areas and the Modeling of Regional Growth Patterns (1955-1995)

Abstract

The analysis of regional differentials of per capita distributed income is the primary theme of regional studies. Using data on Prefectural Accounts and national census employment statistics from 1955 to 1995, we studied the factors that form differentials of per capita distributed income in the three major metropolitan areas (MMAs) of Tokyo, Oosaka, and Nagoya, for which few research papers exist.
The results of our analysis are summarized as follows.
First, per capita income levels (PCIL, =per capita income of each region/that of Japan) for each MMA were higher than 1 (the national average) from 1955 to 1995 by every 5 years. PCIL for the three MMAs peaked in 1960 and declined until around 1975-1980. However, following this decline, PCIL in the Tokyo MMA and the Nagoya MMA started to rise again, but that of the Oosaka MMA continued to decrease to the point where they were lower than that of the Nagoya MMA.
Second, PCIL in each MMA are influenced by the three following ratios: the differential ratio of prefectural income to prefectural domestic gross product (DRIP); the differential ratio of employed persons to population (DREP); and the differential labor productivity (DLP). The ratio of employed persons to population, which affects strongly PCIL, is correlated positively to the ratio of the age group of 15-64 years old, but negatively to the unemployment rate. The all-industry DLP, the strongest explanation of PCIL, is always higher for the three MMAs than 1 (national average), in the order of the Tokyo MMA, the Oosaka MMA and the Nagoya MMA. The all-industry DLP for the Tokyo MMA and the Oosaka MMA declined, whilst that of the Nagoya MMA was stable. Contributing to this was a reduction in DLP for secondary industries (the Nagoya MMA increased), and an increase in DLP for tertiary industries (Tokyo was stable), together with a change in the industrial composition for employees.
Third, observing the share of employed persons and DLP, four main patterns which present regional economic growth are apparent: an incline to the right (growth in economy); a decline to the left (decline in economy); a decline to the right (growth or decline); and an incline to the left (growth or decline). Looking at all-industries, in the Tokyo MMA there is a clear decline to the right and in the Nagoya MMA there is a decline to the right. However, in the Oosaka MMA there was a change from a decline to the right to a decline to the left. For Japan's 3 MMAs, based on individual industries and all industries, clear inclines to the right and declines to the left frequently occurred.