Abstract
This study examines the welfare effects of Japan's 30％ return rate regulation introduced in June 2019 by integrating instrumental variable methods with deadweight loss analysis. Using panel data from 1,741 municipalities from 2017 to 2021, we estimate demand elasticity through loglinear models while addressing endogeneity between return rates and donation amounts. Descriptive statistics show that donations increased even as average return rates declined after the regulation. However, fixed-effects instrumental-variable estimates do not provide statistically strong evidence of a causal effect, and weak-instrument diagnostics require cautious interpretation of the estimated elasticity. Based on the fixed-effects estimates, the deadweight loss associated with a one-percentagepoint decline in the return rate is tentatively calculated as small on a per-municipality basis, but this figure should be regarded as a reference value rather than a definitive policy effect. By transparently reporting statistical constraints, this study contributes to a methodologically careful framework for evidence-based policy evaluation.
