In our complex society, how to evaluate, how to fulfill accountability, and how to achieve agreement are problematic. Some methods have been developed as decision aids in the environmental sciences. However, these methods still can not adequately handle diversity, complexity and uncertainty. Up to now, we have studied the possibilities of using multicriteria analysis for environmental evaluations and as a decision aid. After we present an outline of past research on the application of multicriteria analysis to environmental problems in recent years, we discuss the problems of future studies.
In this study, we focused on theoretical problems of multicriteria analysis. The main problems of multicriteria analysis are how to identify criteria, how to score performance, and how to decide weight. First, we discuss the choices of criteria for multicriteria analysis (MCA).
MCA has a strong advantage for constructing a framework of complex decision problems such as environmental issues. How to choose criteria for the framework of an evaluation is very important. Therefore, we examined the idea of criterion, the problems of past studies, and some actual cases. Consequently, the results show that it is essential to choose criteria by stakeholder participation. However, it is basic to have a consensus on the aim of setting criteria.

JEL classification: D70, D81, D82, Q51, D53

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R&D internationalization by multinational firms has significantly expanded in the last two decades. According to the World Investment Reports 2005, the total R&D expenditure of foreign subsidiaries in host countries worldwide rose from $29 billion to $67 billion between 1993 and 2002, and their shares in global business R&D jumped from 10% to 16%. Each country tries to attract foreign R&D investments in order to enhance national innovative capabilities through the effects of R&D spillover from foreign multinational firms. This paper analyses the effects of a promotion policy for foreign R&D investments with a two-country, two-multinational firm model. The two multinational firms, which are originally based in different countries, allocate R&D resources to their foreign subsidiary to improve foreign affiliate profitability and to source knowledge from the local foreign rival through the effects of R&D spillover. Their R&D location decisions have an impact on the effective knowledge bases and profits of the subsidiary and parent.
I show that a promotion policy for foreign R&D investment, such as subsidies for R&D internationalization costs, increases the profits of the domestic multinational firm more than the subsidies provided to the foreign multinational firm. Increased foreign firm R&D investments in a subsidiary by a subsidy policy enables the domestic firm to receive R&D spillover from the R&D activities of the foreign firm with less transfer of R&D resources to the subsidiary, which means that the domestic firm saves R&D internationalization costs and obtains a greater profit. Moreover, I show that subsidy competition to attract foreign R&D investments by both governments profits both firms and governments, because both multinational firms allocate more R&D resources to their subsidiaries and obtain more R&D spillover from the rival firm. When each firm considers its own profits, R&D investment in a subsidiary is less than optimal because they do not understand that their R&D investment improves the rival's effective knowledge base through R&D spillover. Therefore, I rationalize that both countries should provide subsidies for foreign R&D investment to each other. On the contrary, I show that both firms suffer losses, when both governments compete to restrict R&D resources that domestic multinational firms allocate to subsidiaries by preferential policies for R&D investments in their home countries. The reason is that such a policy competition causes both firms to allocate less R&D resources to the subsidiaries and decreases R&D spillover from the rival firm.

JEL classification: F23, O32, O38

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This paper examines the economic growth and reduction of income disparity under the population migration policy and rural area development in China with an econometric model. The model assesses the impacts of income disparity due to investment and remittance to the place of household registration. The econometric model used to assess these impacts is characterized by an intrinsic combination of demand-oriented short-term mechanisms and supply-side medium- to long-term dynamics, where the balance of aggregate demand and supply determines the cyclic phase of the economy as represented by the overall utilization of production capacity along the long-term path.
The simulations and the forecasts of this model show that continuance of stable economic growth while reducing income disparity in China is necessary to relax the population migration policy, expand investment in rural areas, and improve the education level in rural areas.

JEL Classification: C50, J31, O15, O18, O47, R15

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Recently, some urban facilities have become multi-functional, and management topics have diversified. In order to grasp the problems with urban facilities that have overlapping area s, this study focused on the evaluation of museums and parks. The areas of museums and parks overlap spatially and functionally and heir names are very similar. Originally, conventional museums have the roles of ‘collection', ‘conservation', ‘research', ‘exhibition', ‘education', and ‘pleasure'. On the other side, urban parks have the roles of ‘environmental conservation', ‘recreation', ‘disaster prevention', and ‘landscape planning'. However, both have been attracting more people, so, their roles have overlapped. In this study, problems with overlapping areas of museums and parks were considered by examining the selection procedures for designated management systems by the Tokyo metropolitan government. Consequently, the results show that it is necessary to clarify the role of the facilities, to respect the original roles, to confirm the self-evaluations, and to build partnerships between museums and parks. An approach from museums to parks causes few problems but an approach from parks to museums causes conflicts between conservation and use of resources. Therefore, understanding the priority role, technical device for balancing use with conservation of resources, not maximization of the number of users but optimization, are required to avoid functional confusion between museums and parks.

JEL classification: H41, H43, H49

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Agriculture, forestry, fisheries and food industries have underpinned the Japanese diet. They have also provided Japanese society with the basis for its living environment and cultural activities. However, growing concern over global environmental problems urges the adoption of effective measures for the reduction of environmental burdens in primary industries. Domestic trade among metropolitan and local regions has strongly affected the environmental loads created by agriculture, forestry, fisheries and food industries. Consequently, analyses of regional interdependence in transactions involving agriculture, forestry, fisheries and food industries are necessary to clarify the regional structure of environmental burdens attributable to these industries. Ecological footprint (EF) analysis, as developed by Mathis Wackernagel and William E. Rees at the University of British Columbia, is a useful tool to identify human demands on the Earth's ecosystems and environmental interdependence among regions. Despite its theoretical criticisms, EF analyses are widely used to evaluate environmental burdens created by human demands on nature. This paper proposes an analytical method combining the EF analytical framework with the regional input-output analysis to assess environmental interdependence among regions. The empirical studies use input-output tables and agricultural statistics of Japanese regions for 1990, 1995 and 2000. Finally, we conclude with a discussion of problems with EF analysis based on results of CO2 emission analyses.

JEL classification: C67, O13

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The purpose of this paper is to verify the hypothesis that to reduce income disparity among people in different regions and different income classes in a developing country, it is more effective to develop industries with links to the agricultural and industrial sectors than to pursue industry sophistication. In this paper, we selected as a case study Thailand, where industries have become highly sophisticated and automotive fuels are changing from fossil fuels to biofuels. We focus mainly on the biofuel industry, and showcase agricultural product processing and food processing, the petroleum products industry, and the textile and automobile industries. In order to verify the above hypothesis, we used multipliers of a SAMI-O linked model developed based on the year 2000 version of an input-output table to demonstrate how disparity among people in different regions and different income brackets may change the current social and economic structures of Thailand if these six industries equally expanded their exports. This model is made up of an 89×89 SAM dimension with the following two features: separation of production and household factors into two regions as they are segmented, and the separation of the oil refining sector of production activities into automotive fuels and other fuels, and further separation of automotive fuels into gasoline, ethanol, diesel and biodiesel. We obtained the following test results through inter-industry comparison of these six industries. First, spillover effects were found to be exerted on overall sectors including production activities, labor, capital and households to a larger extent by the biofuel, agrotechnical, and food processing industries, which are related to the agricultural sector, than by manufacturing industries such as textile, automobiles and petroleum products. This test result revealed that it is more effective to process agricultural products into industrial products and export them than to export industrial products such as textile products, automobiles and petroleum products. Next, the results for regional disparity demonstrated that industries related to the agricultural sector and the petroleum products industry reduce regional disparity, whereas the textile and automobile industries increase it. The biofuel industry has a greater effect on reducing regional disparity than any other industry in both the labor and capital sectors. Finally, the results covering disparity among people in different income brackets showed that the petroleum product industry exerts little impact on disparity among people in different income brackets, whereas the biofuel industry reduces disparity. However, this effect is no more than 1/2 or 1/3 of the effect exerted by the agrotechnical or food processing industries. Meanwhile, the textile and automobile industries widen this disparity. These findings verify the hypothesis that it is effective to develop industries with links to agricultural and industrial sectors to reduce income disparity in a developing country.
As described, the industrialization model, which developing countries have adopted to achieve economic development, have not reduced disparity among people in different regions or in difference income brackets, rather the disparities have widened. In addition, the results demonstrate that disparity among people in different regions and different income brackets can be reduced more by export of biofuels, processed upland field crops and processed agribusiness products than export of products from the manufacturing sectors.

JEL classification: Q15, R15, R58

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With the recent development of information technology, teleworking has become remarkable as a solution for problems such as environmental issues, shortage of manpower for labor due to a low birthrate and decline in urban functions at the time of a catastrophic disaster. Both central and local governments show a positive attitude toward the spread of teleworking in Japan. Local governments have established a satellite office, and are promoting policies that positively recommend the introduction of teleworking. However, theory and techniques for forecasting how many people really accept teleworking when the working conditions for telework are not clear, still are not yet established.
In this paper we focus on predicting the demand for the at-home employment type teleworking. We applied a game theoretical approach to describe the switching behaviour of a worker who chooses teleworking or ordinary commuting when he can choose either. We used the conventional approach for incorporating telework links as virtual links into transportation networks to analyze actions to choose teleworking. This allowed us to use the modal-choice model. However, our approach is different from the traditional modal-choice models in that we used the regret-matching scheme that corresponds to generic games. We showed that our approach is useful for predicting switching behavior between teleworking and ordinary commuting when a worker can choose. For example, one of our simulation results shows that the opportunity costs of each action converge to an equal level. Here we assume that the opportunity costs of teleworking are the losses in benefits from face-to-face contacts experienced during the ordinary working style. Furthermore, our approach is very flexible to the ill-defined cost function such as non-convex function, cost function with asymmetric Jacobian and non-differentiable function. These indicate that the proposed method has broader applicability in analysing complex system.

JEL classification: C73, R41

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This study is a statistical disparity analysis of the wages of the staff and working (Zhigong) class in China. The Chinese government strictly controlled the wage system of state owned enterprises before the reform and opening of China. However, this system is gradually being reformed and each enterprise can independently decide their own wage system. As a result, the wage disparity has expanded since the reform and opening of China. In 2006, the staff and workers (Zhigong) were 110 million people, which is about 14.6 percent of the workers and about 8.5 percent of the population of China. To understand the recent wage disparities in China, disparity was estimated with a one stage Mean Logarithm Deviation Decomposition Index and from two directions in the decomposition pattern of disparity across region and industrial sector.
Several findings are presented in this paper. First, a rapid expansion of disparity occurred during the measurement period. The index was below 0.02 at the start and increased to about 0.08 at the end. Second, the main factor of disparity gradually changed from regional disparity to sector disparity. Third, the regional disparity in each sector expanded in the higher value sectors but decreased in the agriculture and industry sectors. Fourth, the tendencies in the disparity of each sector in each region differed.
From these results, wage disparity is a very serious problem in China. Therefore, several difficult correspondences are required from the government to reduce various disparities in the future.

JEL classification: J31, O5

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We investigate whether non-banks excessively or insufficiently enter the consumer loan market. Not only large non-banks such as Acom, Takefuji and Promise, but many small ones operate in the Japanese consumer loan market. These non-banks borrow most of the necessary funds from a few financial institutions such as banks and insurance companies. The market structure observed between these non-banks and firms that supply funds to them is a market with a vertical structure. Therefore, we developed a model of consumer loan markets as an oligopolistic market with a vertical structure, i.e. one upstream monopolistic bank and multiple non-banks. We show that non-banks insufficiently enter the consumer loan market in the long-run equilibrium. This result contrasts the well known "excess entry" theorem.

JEL Classification Numbers: D43, G29, L13

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This paper focuses on problems of predicting business cycle turning points in a regional economy. In the 1980s, the work of Neftci[18]clearly suggested that turning points are naturally defined in nonlinear models of regime switching. However, Neftci's Sequential Probability Recursion (SPR), which failed to signal the turning points, yields fewer false signals and earlier detections of turning points. This paper shows that a posterior probability of turning points change with fluctuations in the economy, and Neftci's model can be extended to improve the performance of turning point forecasts in Japan.
In addition, the duration and the level of peaks and troughs in business cycles fluctuate with industrial compositions, industrial localization and the capital composition of corporations in each prefecture. We then illustrate the application of this "extended Neftci model" using CI (composite index) on the duration of business cycles in Aichi and Gifu Prefectures and compare the business cycles of both prefectures in regards to duration based on CI.
The results of the analysis are summarized as follows. First, the extended Neftci's approach in this paper correctly forecasts all of the past turning points before they occurred in Japan. Second, it also shows better performance relative to the probability of regime switching that signals the predicted turning points in Aichi and Gifu Prefectures.

JEL classification: E32, L11, R11, R15

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Many municipal governments are devising industrial promotion policies that appropriately reflect their local economic conditions by analyzing economic structures based on regional brief input-output tables drawn at the municipal level. However, there are few cases that examine policies at the level of whole local blocks on the basis of comprehensive economic structural analyses for all municipalities in the area.
With a focus on input-output tables for the five prefectures of the Chugoku District, we calculated production and expenditures at the level of livelihood zones, which are multiple municipalities in the district, and analyzed the balance of regional payments obtained. Based on this analysis, we examined the implications of policies for industrial promotion and regional formation in the district from the perspective of local economic independence and sustainability.
A balance of regional payments can be obtained by subtracting local expenditures from local production. Our study revealed that in the Chugoku District, deficit-saddled areas (where local industries cannot generate adequate profits for the residents' livelihood) spread across small cities and mountainous areas. In the meantime, many of these areas contribute to a gain in income from outside the Chugoku District. Based on these findings, we conclude that it is significant for each sphere of life to work as a unit of sustainability and form broader economic zones through reciprocal efforts to boost economic independence in the whole district. To achieve this goal, it is important to highlight the concept of industrial promotion for the sustainability of local societies in small cities and mountainous areas, as well as implement measures for facilitating industrial promotion in central cities and production improvement in combination with the global economy. In addition, it is essential to formulate substantial plans for broader local areas.

JEL classification: R11,R12,R15

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The Japanese ‘One Village One Product' (OVOP) movement is spreading throughout Asia including Thailand, China and Cambodia. As part of the Aid for Trade initiative, the Japanese government initiated the OVOP Campaign. In addition, the government is expanding assistance to Africa. However, critics argue that the sustainability of the movement is heavily dependent on government intervention. Therefore, the movement declines in proportion to the reduction of the government interventions.
In this paper, we examine the effectiveness of the Thai ‘One Tambon One Product' (OTOP) movement, which started in 2001 under strong government initiatives. We identified three characteristics of the movement by studying specific case studies. First, the movement is completely different from the Japanese prototype, OVOP. The movement is a government policy not an endogenous movement. The Thai government plays an important role in human resource development. Second, OTOP is widely accepted by the five star grading products championship system. Earnest efforts in product development have resulted in quality products. Third, the OTOP movement is strongly assisted by information and communication technology including web site based marketing and technology exchange. This reduces the information linkage costs and a village firm maintains a sustainable competitive advantage.

JEL Classitication: R58

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The purpose of this study was to determine the effects of "ecological and environmental migration policy" on pastoralists' household economies in the Inner Mongolia Autonomous Region. Interviews and related surveys were conducted with families living in the grasslands of the Xilinguole League. Under the ecology policies in China, pastoralists migrated to urban areas with a low level of education and with no vocational training to compete with city inhabitants as general workers. In this study, the conditions of pastoralists' household economies under the "ecological and environmental migration policy" was reflected by the simulation and the analysis so the structure of income and the expenditures of pastoralists after migration were clarified, and a case study simulation of "not emigrating" was carried out. About 50-60% of 37 households succeeded in changing the mode of production and improving their living conditions. On the other hand, about 40-50% of the households could not smoothly change the mode of production. Actually, most of them did not receive sufficient subsidies, so their living conditions worsened, especially for households with sick or elderly people.
Supporting the lives of pastoralists is necessary for the success of the "ecological and environmental migration policy", and it is also the first step for the success of environmental policies. Therefore, the local government accepts the environmental measures as an important "duty" of the central government that it must consider as a top priority. Not only governments but also private corporations and local communities need to enhance their concerns for the environment, and support "ecological and environmental emigrants", while realizing their contributions to the environment.

JEL classification: Q56, Q57, R23

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In Okinawa Prefecture, the production of sugarcane, fruit, vegetables, stock, seafood and other agricultural commodities is influenced by the subtropical climate. The share of agriculture in the economy of Okinawa is smaller than the 2nd and 3rd largest industries. However, it is thought that agriculture makes an important contribution to sightseeing, the leading industry in Okinawa Prefecture, to affect the economy and employment. So far, there has been no quantitative analysis of the multilateral value of agriculture in Okinawa and its importance may not be sufficiently grasped.
In this paper, we analyze the multilateral value of Okinawa agriculture with a questionnaire survey analysis and input-output analysis. Specifically, we analyze the multilateral value of agriculture in Okinawa based on the following two points.
⌈Analysis I⌋ Estimated contribution of agriculture to sightseeing in Okinawa ·Based on a questionnaire survey of tourists that come to Okinawa Prefecture, we quantitatively evaluated the contributions of agriculture to sightseeing in Okinawa. As a result, the contribution to sightseeing by agriculture was estimated to be \61.2 billion annually. Also, it was estimated that there is a total contribution of \ 91.3 billion annually by the agriculture and fisheries industry and this is equivalent to 22.4% of the \ 408.3 billion yen income from sightseeing in Okinawa Prefecture in 2006.
⌈Analysis II⌋ The economic ripple effect and creation of employment by agriculture in Okinawa ·The economic ripple effect to the whole country of Japan was \90.6 billion in agricultural output from Okinawa Prefecture in 2006. It was estimated that this was an effect of \ 721.9 billion in gross production (8.0 times the agricultural output), and an additional value of \ 376.5 billion and 77,365 jobs created per year as determined by the input-output analysis.

JFL Classification: Q10, R10, R15

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The existing meanings of urban agriculture are advocated in recent years both in developed and developing countries. With rapid urbanization, many farmlands of urban areas in China have been diverted for industrial development. However, protection of urban agricultural land and continuation of urban agriculture has gained more momentum in recent years. This is against the background of increasing food safety and environmental protection consciousness from both urban residents and government. The functions of urban agriculture are beginning to be reviewed.
This paper aims to discuss the existing meanings of urban agriculture by analyzing related policies on urban agriculture and farmland in China and the consciousness of urban residents toward the functions of urban agriculture. First, through the analysis of related policies on urban agriculture and farmland in China, the focus of urban agriculture and farmland policies is shown to be changing. Second, the assessment of urban residents toward the functions of urban agriculture was analyzed based on the results of internet-questionnaires of residents from both Shanghai and Harbin. The following analytical results were obtained. The functions of urban agriculture expected by the residents of Shanghai and Harbin differ due to different urban problems brought by different levels of development. Furthermore, the impacts of urban agriculture on the quality of life in the two cities are also different.
Last, this questionnaire was conducted through the internet and most answers were from individuals between 20-30 years old of age. Therefore, the results of this study should consider this point when it is used for policy making and additional investigations are necessary in the near future.

JFL Classification: Q10, R00, R14

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Power development has been an important field of infrastructure development in developing countries over the past decades. During the planning stage, an economic analysis plays a vital role for appraising economic viability of master plan and feasibility studies. The practical method of economic analysis employed by these studies has consisted of either an alternative thermal power method or long-run marginal cost method. The alternative thermal power method compares two cost streams, one for a hydropower project under study and the other for an alternative thermal power project, and identifies the method that costs the least to supply power. The long-run marginal cost method measures necessary costs to increase power supply by one unit in an economy.
While these methods have been employed for past economic analyses, cost-benefit analysis, which provides the framework for economic analysis, is constructed on the concept of willingness to pay. However, the method of economic analysis based on the concept of willingness to pay has hardly been employed for power projects. At the same time, manuals and guidelines published by the World Bank and Asian Development Bank mostly explain fundamental methods of economic analysis and common topics among different sectors such as derivation of economic costs. However, practical methods for deriving economic benefits, which differ in different sectors, have not been extensively explained.
Therefore, the purpose of this case study was to confirm and explain the method of economic analysis based on the concept of willingness to pay in the framework of cost-benefit analysis, and to show a practical way for calculating economic benefits based on the willingness to pay method using data and information collected in Malawi. The resulting economic electricity price in Malawi was 0.166 US$/kWh for the boarder price, which seems to reasonably reflect economic scarcity of electricity in Malawi. Economic price for the domestic price was also calculated as 11.01 Malawi Kwacha (MK)/kWh, while the existing electricity price was 1.35 MK/kWh, suggesting that electricity is too cheap in Malawi to attain economic efficiency. The household electrification rate was only 7% in 2007, indicating very cheap electricity is an inappropriate tariff policy in Malawi. It was also found the willingness to pay method is able to incorporate geographical features into the calculation of economic price, because this method derives economic price from the consumer. This feature is not entailed in the long-run marginal cost method for which the economic value is derived from the supplier.
In addition to these features, the case study identified issues for increasing the reliability of this method. One issue is how to obtain reliable data for calculating the upper limit of the willingness to pay, and another is how to choose the percentage of area that represents the consumers' surplus.

JEL Classification: D61, Q48

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The 21st century is called the century of network relations. Relation-oriented activities and synchronicity in communications of local people have become highly respected, supported and expected, which contributes to enriching social space. Spatial autocorrelation is a concept that treats the inter-relations between adjacent distributed numerical values in a specific time. The statistical model represents an autocorrelation term with parameter "ro" and weight structure matrix "W" in a regression equation.
In conventional inferential statistics, the mutual independency of the observed value is assumed and spatial autocorrelation must not exist in the observed value itself or its residuals. However, the phenomenon that geography treats is ironically filled by spatial autocorrelation, and serves as the basis for the learning of geography. Also in a social phenomenon, people are considered to have mutual influences. Therefore, the scope of this model is wide.
I applied this technique to the local diffusion process of agricultural products, mutual cooperation of users by messaging with a cellular phone, and collaborative exercise lessons of university students. The results of each analysis agreed with the observed phenomena. However, this model has few practical report examples. In order to respond to the needs of the world, the usability of the model needs to be improved and its advantages continuously appealed.
In addition, I examined the facilitation and possible application of autocorrelation analysis to the data of diffusion processes for agricultural products as previously reported.
In this paper, first, the pure autocorrelation model that omits independent variables is compared with normal autocorrelation results. Second, an expansive model that takes the effects of a local diffusion promotion center into the structure matrix W is applied.

JFL Classification: B41, C21, C51, C63, N55, O3, O13, O18, Q15, R12

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This paper deals with the effects of reduction of CO2 emission by a Modal Shift from road transport to railway as a result of Transportation Demand Management (TDM).
In Toyota City, roads are seriously congested because of commuter traffic by private cars. Local governments, companies and people in and around Toyota City are concerned about TDM to improve the road conditions.
Double tracking of the Aichi Loop Railway (from Mikawa-Toyota to Shin-Toyota; 3.6 km), an important option of TDM, has been completed. This project has increased transportation capacity, 4 shuttle trains per hour have been operating since March 15, 2008. It is expected that 4,000 commuting passengers will shift from road traffic to the railway.
The Model Shift will reduce CO2 emissions from transportation by private cars at least 1,500 ton per year.
This project has been succeeded, 1,000-2,850 number of commuter passengers have been modal-shifted from private car to railway.

JFL Classification: Q51, R41

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[in Japanese]

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