In this paper, we analyzed the impacts of industrial localization on the production of food industries using panel data analysis. The objective industries of this study were the “Food industry” as a whole, “Manufacturers of food” and “Manufacturers of beverages, tobacco and feed”, and the area of focus was the Tokyo metropolitan area consisting of 4 prefectures; Saitama, Chiba, Tokyo and Kanagawa.
In this study, we measured the industrial localization indices based on Ellison and Glaeser [3] and Mori et al. [13]. Then, we estimated the impacts of industrial localization of food industries on production in the Tokyo metropolitan area by estimating regional production functions. To estimate production function, the D-index was used as an industrial localization index. From the results of this estimation, we found the industrial localization of Japanese food industries has a positive effect on production.

JEL classification: R11, R30

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Data Envelopment Analysis (DEA) is a method for measuring efficiency of a Decision Making Unit (DMU) by taking into account its characteristics. One of the feature emphasized in DEA is the capability of providing an improvement plan that makes an inefficient DMU efficient. It is assumed that all evaluation items can change independently in the calculation of an improvement plan. However, this assumption may not be realistic. Normally, some interactions between evaluation items should be assumed and the interaction may be described by equilibrium conditions. If this assumption does not hold, any improvement plans from DEA may not be applicable to a real problem since the improvement plans are impossible to carry out. In this study, a method for calculating improvements in a plan that allows interactions, including equilibrium conditions that are difficult to denote by closed forms, between evaluation items is proposed. Taylor's first order expansion is used to approximate the interactions between evaluation items. If the interactions are expressed by linear functions, a problem that calculates an improvement plan is formulated as a nonlinear optimization problem with some constraints. In addition, a standard algorithm for solving nonlinear optimization problems can be applied to calculate the improvement plan due to convexity of an objective function and the constraints formulated. On the other hand, if the interactions are not expressed by linear functions or are expressed by equilibrium conditions, a problem for calculating an improvement plan is formulated as a fixed point problem. An algorithm for the fixed point problem is developed based on Kuhn-Tucker conditions. Lastly, two simple numerical examples are presented in this paper.

JEL Classification: C61, C67

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The purpose of this paper is to investigate the dynamic properties of environmental R & D and environmental policy by analyzing infinite horizon stochastic differential games between two governments. In this paper, we formulate stochastic differential games that need to be solved by the two governments, and derive and characterize the cooperative and Markov-perfect Nash equilibrium solutions. By comparing the two equilibrium solutions, the free-riding behavior of governments can be explored with regard to pollution control. The steady-state levels of emission tax, pollution stock and value function were also derived and compared. In conclusion, we obtained a higher emission tax, a lower pollution stock, a higher value function under the cooperative solution when compared to the Markov-perfect Nash equilibrium solution.

JEL Classification: F18, L13, Q58

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This paper examines the existence of users' preference for flat rate media access fees and further identifies those factors that influence such preferences. Specifically, we explore consumer addiction to flat-rate pricing plans, defined as “flat-rate preference,” and examine such concepts from the perspective of behavioral economics.
This paper applies several important concepts invoked from behavioral economics to provide more reasonable interpretations of consumer preferences for flat-rate pricing plans. Behavioral economics, though difficult to apply empirically, provides deeper insights into consumer behavior since it includes psychological factors which allow for the consideration of irrational choice behaviors.
Towards this end, we first test the existence of consumer preferences for flat-rate pricing plans. Then, we investigate the factors that can be used to further understand and explain such preference. More concretely, we examine how fundamental concepts from Prospect Theory such as loss aversion, dependency upon reference points, and the shape of the probability weighting function can explain consumer inclinations towards flat-rate plans. Other fundamental concepts such as mental accounting, ambiguity aversion and cognitive dissonance are also applied to further explain such preferences.

JEL Classification: C14, C91, L86, L96

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Tokunaga, Kageyama and Akune [21] found the existence of a positive effect of agglomeration on production in Japanese manufacturing industries using the index of agglomeration by Ellison and Glaeser [6] and plant-level 4-digit classification panel data from 1985, 1990, 1995 and 2000. In this paper, we examine the existence of agglomeration and co-agglomeration effects on production in the Japanese manufacturing industry using plant-level 4-digit SIC data and agglomeration and co-agglomeration indices for 1985, 1990, 1995 and 2000. This co-agglomeration index was developed by Tokunaga, Kageyama and Akune [20] based on the index by Ellison and Glaeser [6]. Using the flexible translog production function and cost share equation suggested by Kim [12], we found positive effects from agglomeration and co-agglomeration on production in the Japanese manufacturing industry in the absence of any restriction on homotheticity.

JEL Classification: R10, R12, R30

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Utilization of the potential energy in wastes is essential for achieving sustainable development. This will not only reduce pollutants and greenhouse gases (GHG) from wastes, but also provide many other advantages. Emission taxes and subsidies are thought the most applicable and effective for promoting effective use of the potential energy in wastes. The aim of this study was to evaluate the effects of these economic policies on the use of the potential energy in wastes.
A socioeconomic model based on I/O was constructed to consider the flow of wastes and energy. This model is a dynamic optimizing model that considers the change of production through investment. New industries producing energy from wastes, as well as emission taxes and the subsidies were introduced into the model. The results of the simulation showed that three new energy industries achieved production and were able to replace fossil fuels or change the industrial structure to decrease the consumption of fossil fuels. In the presence of these new industries, GDP increased under severe GHG constraints, and GHG emissions decreased below the target for the Kyoto Protocol if the tax rate was more than 20,000 yen per ton carbon, and emission taxes and subsidies were introduced.

JEL Classification: Q42, Q48, Q53

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Urban planning has, in its rich history, often been reviewed from the perspective of different philosophical, ideological and methodological approaches by planners, architects and social scientists. In this paper, we aim to highlight the debate on urban planning in the context of planning history and to address some of the most fascinating questions asked in the urban planning literature. We focus on 7 FAQs in urban planning, while we address 7 differently given answers for each question. Therefore, our tree-like exercise consists of 7×7=49 different approaches to urban planning. Our questions are derived from planning theory and practice, planning methodology and techniques, urban development, urban management and urban future. The paper will be concluded with a concise speculative agenda for the future of urban planning.

JEL Classification: O18, R14

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In Japan, the ratio of vacant houses to the existing houses is now 12.2%. This is a sufficient number of houses. Thus focus of the housing policy in our region need to be on the quality of houses. However, there are rare papers in economics about housing policies to improve the quality of houses. Especially, there is no research on tax system about the quality of housing. We analyze tax system to improve the quality of rental housing which is needed in our region.
There are cases that the investment to raise the quality of rental housing are not profitable as was shown in the other researchers' work, that is, there are cases that investment is costly and rent do not go up by investment as much as increment in cost to raise the quality of rental housing.
In this paper, first, we develop a stock-flow model of rental housing including tax system, in which demand for houses with a certain quality (a bundle of characteristics) equals houses supplied with that quality. Second, we show the method to check whether investments to improve the quality of houses are profitable or not. Third, if the investment is not profitable, we propose a tax system to complement that to raise the quality of rental housing. Fourth, we propose the requirements for such a tax system i.e. concrete conditions using the model. Fifth, we show the economic effects of the tax system. Sixth, we provide examples to apply such a tax system, that includes earthquake-proof investment for wooden apartment buildings and reinforced steel framed condominium housing. The earthquake-proof investment for wooden apartment buildings was proved to be not profitable by the other researcher's work. We prove empirically that earthqualce-proof investment for reinforced seel framed condominiums is not profitable, which shows the need for the tax system proposed in this paper. Seventh, we show the way to find out cases to apply this tax system.

JEL Classification: R31, H25

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Fiber-to-the-Home (FTTH) is a technology that enables broadband Internet access through the installation of optical fiber cable between the carrier's central office and the subscribers' premises. It has emerged as the fastest growing broadband access technology in Japan today. Telecommunications carriers are aggressively investing in optical fiber infrastructure mainly in urban areas. The rapid growth, however, is causing concern over the divide between the densely populated areas with access to FTTH network and rural areas without, and it is now one of Japan's leading telecommunications policy issues.
At present, the quantitative impact of FTTH has not been fully analyzed. It is difficult to evaluate the benefits of FTTH from real data because the market conditions of FTTH are still rapidly changing. The objective of this study is thus the analysis of the benefit of FTTH and the examination of the economic rationale of the initiative of nationwide FTTH deployment. Stated Preference (SP) method is applied to collect the data of consumers' preference. Utility function for FTTH is estimated by the choice probability model and the marginal willingness to pay (WTP) for the availability of applications, such as digital terrestrial broadcasting, IP telephony and other public services, is computed. Then the consumer surplus of FTTH is estimated from the estimation results and, finally, the gross benefit of FTTH is compared with the cost that is calculated in the previous study.
As a result of the estimation, the gross annual benefit of FTTH ranges from 4,031.6 billion yen (both TV channels and IP telephony service available over FTTH) to 2,457.2 billion yen (TV channels unavailable, only IP telephony available). From the cost benefit analysis in a 20-year time frame, decision variables, such as Net Present Value (NPV), Cost Benefit Ratio (CBR) and Economic Internal Rate of Return (EIRR), seem to be sufficient to support the investment; especially when TV programs are available. However, the assumption of the typical cost benefit analysis, especially the long time frame, is not always realistic in the rapidly changing ICT market. Therefore, we examined the period in which the accumulative benefits need to outweigh the accumulative costs. As a result, it may take 8 to 11 years to balance out the benefits and the costs. To shorten the period, it should be considered to raise the penetration rate and to reduce the development cost. Also, the marginal WTP is calculated in each of five areas with different geographical settings. The respondents in mountain and rural areas indicate higher WTP for the availability of TV channels over FTTH. Therefore, it is considered that the transmission of TV channels over FTTH may play important roles for raising the penetration rate and expanding the consumer benefit of FTTH.
The significance of this paper is the proposal of the practical method of exercising the cost benefit analysis of FTTH and its implementation. This study also proposes a means to evaluate the benefits of a rapidly growing telecommunications service in relation to the availability of applications for it. Finally, this paper postulates several broad assumptions required to attain these results.

JEL classification: D12, R11

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In this paper, the system of the provision of municipal water through the market mechanism including some forms of “privatizations” is considered in the view of the normative aspects of resource allocation and welfare under the uncertainty of water quality. We investigate the condition under which the market mechanism works effectively for the allocation of municipal water, which has the particularities such as public goods, environmental risk, and non-convexity in production and preference. Especially, there are not so much the studies on the demand side of the municipal water as those of the supply side.
We have three steps to take the effects of the uncertainty of the quality on the provision system of the municipal water into consideration. First, the first and second fundamental theorems of welfare economics are reviewed and the cases that the market mechanism fails to satisfy the optimal allocation are shown. Second, among those cases, the problems relevant to the municipal water provision under the presence of environmental risk and asymmetric information between water supplier and regional consumer are considered. We review the analytical framework of credence goods and show the advantages of using it when the uncertainty of the water quality is at issue. Third, we assume that some private firms have chance to contract to provide municipal water and examine how the credence of municipal water, that means quality regulation, effects on the price and water quality level using an analytical model.
A regulator of municipal water provision should control municipal water supplier by means of some kind of penalties and inspections, which work on the risk attitudes of the supplier and the probabilities of detection under informational asymmetry.

JEL classifications: L15, L33, L95, D82

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The aim of this article is to clarify the determinants of agglomeration for food industries in Japan. Characteristics of industries that proxy the presence of domestic and imported agriculture products, processed foods, manufactured goods except for processed foods, the manufacturing labour force and market size related to agglomeration are estimated. The analysis is conducted separately at a whole food industry and industries that are classified by 3-digits of the Japan Standard Industry Classification.
Results indicate that domestic agriculture products as materials, and processed foods and manufactured goods as intermediate goods have a positive influence on agglomeration for the whole food industry in Japan, with manufacturing labour force and market size.
Focus on agriculture products, processed foods and manufactured products of each industry showed that processed foods positively affect agglomeration in seasoning, bakery and confectionery products, and soft drinks. Both processed foods and manufactured products have a positive effect on agglomeration for tea and coffee. Both processed foods and domestic agriculture products are determinants of agglomeration for seafood products, miscellaneous foods and related products. On the other hand, the determinant of agglomeration for livestock products is only domestic agriculture products.

JEL classification: R30, L66

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In this paper, we examine the existence of agglomeration and co-agglomeration effects on production in a rural city Japanese food industry from 1985 to 2000 using a city-level 2-digit subclassification, panel dataset, agglomeration index (Henderson 2003), and co-agglomeration index (Ellison and Glaeser 1997). The Cobb-Douglas production function based on Nakamura and Eshima (2004) showed that agglomeration and co-agglomeration positively effect scale economies in the rural city Japanese food industry.

JEL Classification: D24, E23, R11

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This paper analyzes the macrodynamics by which the government controls government spending and the central bank controls long-term interest rates under the New-Keynesian economy. This study focuses on the sticky-price model, in which firms staggeringly set the prices of the goods over time, and sticky-information model, in which firms staggeringly obtain information over time, by using linear quadratic differential games. I show the interactions between the strategies of two policy authorities and the implications of these strategies under their respective models.

JEL classification: C73, D43, E12, E63

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Local governments have conducted many public opinion surveys of citizens in order to measure public opinion on the so-called municipal mega-mergers of the Heisei era. The results of these surveys have played an important role in municipal mergers. In this paper, we report the survey responses and public opinions on the municipal merger of the Noshiro-Yamamoto area in 2004. This paper examines (1) the response rate and survey participation, (2) the nonresponse rate and (3) the characteristics of public opinion by age group. A correspondence analysis of the results indicates a correlation between the characteristics of public opinion for city design and the ages of the citizens. Problems in measuring public opinion and conducting social surveys for local governments are also discussed.

JEL classification: R59, D70, D79

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Technology Improvement does not necessarily improve people's situation in rural areas of developing countries. Arsenic contamination of underground water in Bangladesh is one of the cases. They have been suffering from arsenic disaster of drinking water since 1993. Various alternative technologies were introduced to supply safe drinking water since arsenic contamination was discovered. However, the technologies were not necessarily accepted by local residents. Many inhabitants carry water everyday from safe water sources which are sometimes far from their houses. Otherwise, they continue to drink arsenic contaminated water of the wells which are located close to their residences even though they know the water is arsenic contaminated. Here, we can recognize the arsenic contamination problem in Bangladesh as the disaster which is deeply related with local people's social environment.
Paying attention to the relation between the disaster and local social environment in Bangladesh, the methodology on evaluation and introducing process of water resources alternatives for mitigating arsenic contamination disaster on drinking water is presented. In the study, local residents' behavior about water resources selection is in particular focused on. Two models are introduced to describe their behavior; one is for evaluating people's psychological stress of carrying water and the other is for evaluating people's capability to get safe water. The two models are combined and the function of evaluating local people's behavior on water resources selection is developed. With this function, the place where the alternative should be introduced and the type of alternative which are preferable for considered local people can be analyzed.

JEL Classification: I32, Q01, C72

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Numerous outcomes of the theoretical and empirical studies on community/local currency systems indicate that the activities of these systems have several socioeconomic effects on regional communities. However, it is difficult to state that these systems have succeeded in terms of their practical operations in recent years. In order to cope with this difficulty, we propose two points: (1) problems of interface between the community currency transactional schemes and their practical use by participants and (2) problems with operational assessment of these systems. Regarding (1), we examined whether transactions are conducted in the theoretically assumed manner. Regarding (2), we propose a social effect (a number of interpersonal relationships developed through transactions) as a measure for assessment of these systems.
Questionnaire surveys were conducted and transactional records were gathered for a social network analysis on two community currency associations (“BYTS” in Stockholm and “Ichi-Muraoka” in Kami-cho). Based on a comparative analysis, we conclude that (a) community currency transactions are not conducted in the theoretically assumed manner, and (b) each region has its unique social and environmental context, so the manner in which transactions are conducted and social effects provided vary among regions, indicating that (c) community currency transactional schemes should be modified according to the uniqueness of a region.

JEL classification: P25, P46, C10

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In Korea, environment-friendly agriculture is one farming technique to increase farm household income and pursue both environmental preservation and safety of agricultural products by estabilizing sustainable agricultural production with harmonization between agriculture and the environment (Ministry of Agriculture and Forestry). This articulation was established by the Korean government in 1997 as the Environment-friendly Agriculture Promotion Act and 1998 was declared to be the starting year for environment-friendly agriculture. In addition, a direct payment system for Environment-friendly Agriculture was introduced in 1999. Subsequently, the Environment-friendly Agriculture Promotion Act was revised and a five-year plan for Environment-friendly Agriculture was implemented in January 2001. These policies greatly promoted environment-friendly agriculture and as a result environment-friendly agriculture, including organic agriculture, increased rapidly.
Currently private certification institutions are increasing to privatize the certification of environment-friendly agricultural products. This participation from private certification institutions is expected by the local government and farmers to be an important key in revitalization of the local communities. This paper focuses on the current state and characteristics of these private certification institutions to promote environment-friendly agricultural products and contributes to the development of environment-friendly agriculture and local communities.

JEL classification: Q18, Q56, Q58

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The purpose of this paper is to evaluate the introduction of health promotion projects by willingness to pay (WTP). The evaluation was conducted on metabolic syndrome users of a community-based sports club. When introducing a project, measuring project expectations of the users in advance brought about effective information for a project plan. The expectation for the project presented the scenario which built six projects virtually, and was measured by making a club user determine the additional charge of a project. A questionnaire was performed for 283 users of a community-based sports club in Tokushima.
WTP was asked in a debit-card formula, and direct payment was not asked. A payment-consent rate was calculated by dividing the number of users who paid for a project scenario and gave consent from the sample total. The distribution is assumed to be the effective Weibull distribution function of a payment-consent rate. It applies regression analysis and presumes results using a least-squares method. The consent rate computes the median of the WTP corresponding to 0.5 using the obtained payment-consent rate curve. The analysis is advanced using this value.
As a result, the WTP for an obesity improvement program was higher than the WTP to purchase a training machine and the cost of training staff. In the WTP for an obesity improvement program or staff training, a specialized coach received a higher evaluation than no coach. The results were clearly influenced by the following 4 factors, 1) a woman client, 2) the life based on seating positions, 3) exercise for health, and 4) a high comprehensive evaluation of club activities. In a project for the health promotion of residents, it is important to estimate the project by evaluation of residents before establishing the health promotion program.

JEL classification: I12, I38, L83

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