Most of renewable energies are in the early stage of an industry and have environmental value. Therefore, this uniqueness must be taken into account when we consider economic policies such as subsidies to promote such technologies. Previously we constructed a growth model of renewable energies, in which the learning effect dominating the cost of the early stage of industries and the demand of consumers for environmental value were considered. In this study we connected the above growth model with the comprehensive socio-economic optimizing model, and examined the effect of economic policies such as a greenhouse gases emission tax and a subsidy the whole Japanese economy, and the total amount of greenhouse gas emissions with the residential photovoltaic industry as a case study. In the growth model, the demand change when renewable energy industries are subsidized with a restricted budget and the parameter changes with social cognition by the diffusion of renewable energy itself are also considered. The socio-economic optimizing model consists of the input-output relationship for monetary balance, some macroeconomic balances and GDP as the objective function.
We examined first the effect of a promotion policy consisting of a tax on greenhouse gas emissions and a subsidy for the residential photovoltaic industry financed by the tax income. The simulated period was from 2005 to 2015 and the policy was introduced in 2007. The photovoltaic cell increased proportionally to the tax rate and significant growth was observed in 2007, the first year of the promotion policy. However, predicted photovoltaic power supply in 2015 was no more than 0.8% of the total demand and this suggests the promotion policy for a single industry is insufficient to contribute to a decrease in global warming. As for the total national economic and environmental effect, both GDP and total greenhouse gas emissions decreased with introduction of the emission tax. Next, we examined the case when total emissions were restricted. Diffusion of the residential photovoltaic industry was also remarkable early in the simulated period. GDP increased when the emission tax and subsidy was introduced into the simulation, indicating the promotion policy for renewable energy industries may be effective even for the economy, under strict restriction on greenhouse gas emissions.
The results of the simulation showed that the promotion policy is effective for increasing production of the residential photovoltaic industry, for reduction in total greenhouse gases emissions and for an increase in GDP when the total emissions of greenhouse gases are restricted. Further studies are planned on a comprehensive promotion policy for renewable energy contributions to mitigate global warming and energy resource depletion by expanding this simulation model to other renewable energies and reconsidering the whole energy system.

JEL Classification: C63, O13, Q42, Q48, Q54

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This paper focuses on the special zones system for structural reform. Since it was introduced in 2002, the numbers of proposals and bold ideas are decreasing. Low incentives of potential proposers to make proposals are major problems of the special zones system that need to be resolved. As the causes of this problem, we point out two reasons: an asymmetric authority of the government ministries and agencies at the ex-ante and ex-post assessment of proposals, and an inaccuracy in the ex-post assessment.
To understand the characteristics and investigate a design of an efficient social experiment for regulatory reform, we built an incomplete information game model to describe the procedural processes under the special zones system of safety regulations. First, we showed the model has two types of equilibriums by analytically solving the model. Second, by numerical experiment, we showed that the process of social experiments under the special zones system promotes incentives for potential proposers to make proposals on regulatory reform. This effect works well especially when the interests of presiding government ministries are negative for regulatory reform. However, when the results of social experiments are difficult to assess, it does not work well. Finally, we investigated the design of a social experiment by numerical experiments As a result, the incentives of potential proposers drastically decrease when an experimental period is too short, so it is important to set an appropriate experimental period. In addition, we also showed that we can shorten an experimental period for such regulatory reforms that relax regulations to prevent accidents under high accident rates.

JEL classification: H41, H54

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In this paper, we analyze the progressive effects of Information and Communication Technology (ICT) use in terms of regional productivity based on regional economic data. To consider as many factors as possible, we used the Total Factor Productivity (TFP) as the main indicator of productivity. Each Regional TFP index was calculated following the example of Caves-Christensen-Diewert to compare not only differences among prefectures but also time series. The indices showed the progress of ICT use are as follows: the ratio of enterprises in the region using fiber-to-the-home (FTTH) services (enterprise FTTH use), the ratio of enterprises in the region using a network among enterprises (enterprise network use), the regional average of the amount that indicates whether or not enterprises in the region employ a Chief Information Officer (CIO) (CIO establishment), the ratio of enterprises in the region using a telework system (enterprise telework use), the ratio of establishing local public networks in the region (local public network rate), and the ratio of classrooms in the region connected to a LAN (local area network) (LAN classroom rate).
First, we estimated TFP employing the panel instrument variable method, using the panel fixed effect and random effect models, due to the possibility of endogeneity. Second, we employed a two-step system GMM to take into consideration endogeneity, autocorrelation and reverse causality of dependant and explanatory variables.
The results indicate that increased use of ICT has a positive effect on regional productivity. In addition, these results show that not only enterprise ICT use (enterprise FTTH use, enterprise network use, CIO establishment and enterprise telework use) but also, through enterprise ICT use, regional informationalization (local public network rate, LAN classroom rate) can have a positive effect on the productivity of regional economies in Japan.
We conclude that a positive attitude toward an informationalized society can have a positive effect on productivity at the prefectural level.

JEL classification: O11, O18, O33, O47, E23

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This paper provides a comparative analysis of international risk management with respect to finite risk¹ for two countries, Australia and Japan that suffered losses from the airplane crashes of 9/11 (nine-eleven). Finite risk used to manage risk forced an insurance company in Japan and another insurance company in Australia into bankruptcy.
Finite risk was originally created as a risk management strategy and has been extensively used in recent years by multinational corporations through their insurance subsidiaries, as well as by internationally-operated insurance companies. Like other structured finance strategies, finite risk is considered an advantageous hybrid risk strategy in finance that features both insurance and finance mechanisms. This paper argues that finite risk provides various benefits, especially when companies deal with international risk, because finite risk can more effectively deal with unexpected situations.
Collapse of insurance companies illustrates that finite risk applied internationally has inherent problems of abuse. By comparing related cases in two countries, Japan and Australia, this paper examines the problems associated with finite risk, and then proposes possible solutions and suggestions.

JEL Classification: F30, G32, G34, M21, M48

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In this study, we performed multivariate analyses on regional economic movements at the prefectural level using data representing regional economies. Various findings were obtained from this study.

First, the factors driving regional economies change with the economic and social backgrounds of each period. During a high economic growth period the industrial structure has a significant impact (for example, lower primary and higher secondary/tertiary industry ratios bring a higher economic potential), but the factor is less significant. This may be because the industrial structure largely governs regional economies during the economic growth period, while other factors more strongly affect the economic potential as the economic structure becomes more advanced and complicated with an increase in the service economy.
Second, the financial capability index and the academic background index move regional economies consistently to positive growth through the periods. On the other hand, except for a few exceptions, per-head budget allocations from the central and local governments for public works projects negatively affect regional economies. This implies that reliance on the budget allocations does not eventually contribute to the regional economic power.
Third, as time advances from the high economic growth period to the modern times, the affect of the Z2-axis, i.e. the axis for employment and living, weighs greater than the Z1-axis, i.e. the axis for economy and finance. This suggests that the factors affecting regional economies are shifting from the industrial to the employment and living structures.
Fourth, the gaps between regions have narrowed in the trend. During the shift from the industrial age to the service economy age the gap widened, but the gap appears to gradually narrow as each region takes measures to change the industrial structure. However, regions that rely on public works and a low academic background ratio may face a severe environment.

Next we performed a comparative analysis of the interesting regions and the above mentioned affects were demonstrated in each case. This model was shown to be effective to clarify the features of individual regional economies. Therefore, we can analyze the economic structure of individual regions by applying this model to study the local economic measures.

JEL Classification: R11

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Mineral resources as exhaustible and scarcity items are one of the most important supports for countries and cities, especially resource-based cities that provide the majority of raw materials to improve the development of the regional economy. Accordingly, it is crucial for resource-based cities to practice sustainable utilization of mineral resources and sustainable development of the region by appropriate coordination between the economy and the environment. Therefore, a new concept for determining the capacity for sustainable development of resource-based cities (CSDRC) and a conceptual model are proposed from viewpoints of system science and sustainable development. This paper constructs a synthetic evaluation system of CSDRC to assess the sustainable development of resource-based cities from both static and dynamic analyses. Principle Components Analysis (PCA) is adopted to analyze the CSDRC of Panjin City and to statistically compare it with seven similar resource-based cities. After which, the forecast method of Back Propagation (BP) Neural Network is utilized to dynamically measure the developing trends of the CSDRC of Panjin City. The comprehensive evaluation of CSDRC is expected to improve the sustainability evaluation and form the basis of decision-making for sustainable development of resource-based cities in China.

JEL Classification: Q01, C61, R11

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This paper describes an investigation of the technological relation between fertilizer utilization and weather risk for wheat production in the Adana Province of Turkey. Reports of studies on this intensively investigated topic have concluded that risk-averse farmers use less fertilizer (i.e. fertilizer is a risk-increasing input). However, recent studies assessing the environmental problems of agriculture present the view that production risks may cause over-utilization of fertilizer (i.e. fertilizer is a risk-decreasing input). Provided that fertilizer is a risk-increasing input, the existing literature on the studied area found risk-averting behavior in wheat producing farmers. Because farmers in the area studied recognize over-utilization of fertilizers from the aspect of sustainability, so the assumptions in the existing literature should be tested by directly estimating production technology. Two shortcomings are apparent in studies estimating production technology. First, the production technology assumed by these studies limits the farm management under production uncertainty. Second, the estimation method does not suit individual data collected in regions that have similar production environments. Different from earlier studies, this paper presents a state-contingent technology approach that affords decision-makers more flexible management choices under production uncertainties than the conventional approach does. This paper introduces a sufficient condition for risk-averse farmers to use more or less fertilizers than the risk-neutral farmer. Subsequently, the production technology is estimated and the sufficient condition is tested. Results show that the risk-averse farmers will use less fertilizer than the risk-neutral farmer.

JEL Classification: D81, Q12, Q52

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There is recent evidence to demonstrate that the adoption of agricultural technology varies significantly across space and time. Agricultural technologies for farmers are usually introduced either through a farmers' own experience or through neighborhood farmers and social learning seems to encourage diffusion. Given the significance of the socioeconomic impact of the diffusion of agricultural technology, many papers have examined empirical issues associated with the adoption and diffusion of new technologies. However, for agricultural technology diffusion, there are few studies that incorporate social learning in Japan.
In this study, we investigated the neighborhood effects on the diffusion of agricultural technology. We constructed a duration model of agricultural technology diffusion that incorporates the neighborhood effect as one social interaction. The model was applied to data on the diffusion of farming technology using crossbred “Aigamo” ducks in Japan. The data is self-reported historical data on the time of adoption for rural households. The results show that (i) a farmer's adoption of agricultural technology depends positively on the number of previous adopters and the proximity of his farm to other farms, providing evidence for the existence of the neighborhood effect; (ii) neighborhood effects promoting the adoption of agricultural technology seem to be stronger in the later stages of diffusion; and (iii) organizations created by farmers play important roles in facilitating technology diffusion in the early stages. From these results, we conclude that the models for adoption of agricultural technology should be estimated by taking into account social interactions and, in particular, the existence of neighborhood farmers. The failure to control the neighborhood effect may bias the estimation of parameters.
These results have some policy implications. First, in the early stages of new agricultural technology diffusion, supporting the voluntary activities organized by farmers contributes to facilitating the agricultural technology diffusion. Second, in the later stages of new agricultural technology diffusion, it is important to support the creation of communication opportunities with innovators. Finally, neighborhood farmers may have unequal influence on other farmers. Nearby leaders may influence later adopters (followers), but small farmers may have little influence on followers. The analysis needs to be extended in these directions in future work.

JEL Classification: O33, Q12, Q16, Q55, R23

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The purpose of this paper is to investigate a stochastic differential game of transboundary pollution and environmental policy.
We considered two asymmetric countries. The production process results in the emission of pollutants that are added to the existing stock common to both countries. The pollution accumulation dynamics is affected by an additive shock, the mean and variance are known. In both countries, the government controls emission levels. Uncertainty is incorporated into the model through a shock. The stock of pollution evolves stochastically according to geometric Brownian motion. In order to maximize the expected net present value of social welfare, the two governments should set the emission levels.
We formulate stochastic differential games that need to be solved by the two governments and derive unique Markov-perfect Nash and cooperative equilibrium solutions. Subsequently, we propose a mechanism to derive the payoff distribution procedures of subgame consistent solutions in cooperative stochastic differential games for the two governments, and are able to derive a subgame consistent solution based on the Nash bargaining axioms.
In conclusion, we show how the governments agree to maximize the sum of their expected payoffs and divide the total cooperative payoff so that the Nash bargaining outcome is maintained at every instant of time. Moreover, we show conditions guaranteeing individual rationality.

JFL Classification: F18, L13, Q58

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In this study, an Obihiro City model based on system dynamics was developed to provide a comprehensive assessment of the sustainability of the city, which is emphasized in recent years. Obihiro City was selected as an environmental model city in 2008. Therefore, the city has a feasibility of being a sustainable city. Meanwhile the city faces serious concerns with rapid aging and a very low birthrate. In this study, the sustainability of Obihiro City was evaluated with the following indexes as output indicators of system dynamics.
Social indexes
·Low birthrate ·Aging
Economical indexes
·Financial capability index ·Work force ratio to population
Environmental indexes
·Public transport share ·Food self-sufficiency ·Bioenergy production
The city model developed in this study is comprised of three sectors, i.e. the society and population sector, the economic sector, and the environmental sector. The model was developed by considering the relationships among the sectors.
The model clarified that aging and a low birthrate will continue. This finding reflects the employment situation of women and a resulting decline in wages. Financial capability index will increase because of the decreasing population. Moreover, the ratio of employees will decrease because of aging and a low birthrate. As for the environmental indicator, the public transport share will decrease in the future. Food self-sufficiency will increase because of a decrease in the population. Bioenergy production will slightly decrease because of agricultural production.

JFL Classification: Q01

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The Super Gateway Port Policy was implemented by the Ministry of Land, Infrastructure and Transport to strengthen major ports, in particular for container transportation, to compete with ports in Asian countries during this era of market globalization and dispersion of production sites. Nagoya Port and Yokkaichi Port were designated as the Ise Bay Super Gateway Port in 2004. The Ise Bay Port has several issues such as Nagoya Port is very short of lands for logistics and Yokkaichi Port is developing slowly. Yokkaichi Port can complement the lands and the functions of the Nagoya Port if the two ports are more cooperative. However, the shippers and other agents using Nagoya port have little motivation to move to Yokkaichi port, because they have established business connections with relevant agents in Nagoya. From questionnaire responses from shippers using the ports that we conducted previously, the choice of port depends on trading partners, handling territory of the logistic company, and other decisions. In this study we aimed to clarify socially effective connections between the agents in businesses, and to analyze the impacts of such connections and policies on port cooperation. For these purposes, we apply the method of social network analysis that is used to consider characteristic connections among social agents. The network is comprised of nodes and links where the nodes commonly denote agents such as humans or company organizations, and the links denote the connections. In this study, the nodes included the characteristics of agents, including reasons of port choice. Commonalities of agents were revealed as distinct bundles of characteristics. In this way, we clarify the kinships of shippers in the first analysis, the relativities among the decision factors of port choice in the second analysis, and relevancy among decision factors in the third analysis. Matrix calculations with the data obtained from our questionnaire produced several insights for understanding the characteristics of shippers and relevant region. Moreover we can refer to possibilities for policymaking as follows; the first analysis contributes to analyzing impacts of policy on the communal shippers, the second analysis is useful for specifying the target of port sales policy, and the third analysis is available for policy mix proposals according to relevant factors of port choice. In conclusion, we propose five possible policies to encourage the shippers using Nagoya Port to move to the Yokkaichi Port.

JEL Classification: C80, H54, R53

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In this study, the actual conditions of a business alliance in food-related industries, its influence on the performance of enterprises and the role of research institutions and administrative bodies were clarified by an analysis based on the results of a questionnaire survey for both Heilongjiang Province of China and Niigata Prefecture of Japan.
First, from the analysis of food related companies, it was clarified that a business alliance is developed based on the business environment and the management strategies of the companies, and contributes to the performance of the company by encouraging innovation.
Second, from the analysis of the research institutions, it was shown that if these institutions only stay with the purchase of the information etc., even when participating in the network, a business alliance seldom leads to a technology transfer and technological development no matter how high the expectations for making the study results a business.
Third, from the analysis on the administrative bodies, it was clarified that the approach for the “Industry Accumulative Development” policy developed by the district installation was not widely advanced, and the realities revealed an insufficient innovation in the development district installation.
In conclusion, based on the above-mentioned analytical results, constructing a network by promoting business alliances between enterprises, and forming an industrial cluster can be effective cluster strategies.

JFL Classification: M16, O19, L25, R11

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Recently, Batabyal and Yoo (2010) have conducted a probabilistic analysis of guided tours for a single class of tourists during the slack season. In this note, we extend the above analysis by considering the case of two distinct classes of tourists. Specifically, we first describe a general model that accounts for the common features of guided tours to city attractions and to other scenic locations. Then, we obtain a closed-form expression for the long run fraction of time that the guided tour providing firm under study is occupied and hence unable to immediately satisfy the demand for additional such tours.

JEL Classification: L830, L230, D810

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This paper explores the changing patterns of the geography of educational segregation across neighborhoods in the Seoul metropolitan area during the 1995-2005 period, and investigates whether spatial clusters of a specific educational group can be isolated across neighborhoods in the metropolitan area. Three key findings were obtained. First, the college-educated groups are highly segregated from their less educated counterparts, but segregation has decreased for both of the college-educated groups. Second, overall declines in multi-group segregation over this period were mainly due to declines in segregation of the group of college graduates, and to a less extent declines in segregation of the lower educational groups. Third, the residential pattern of educational segregation is by nature spatially clustered and becomes more clustered over the period. The neighborhoods with a relatively high level of human capital tend to be localized close to other neighboring areas with a high level of human capital. This paper concludes by discussing implications of the findings for theoretical and empirical research on the polarized geography of neighborhood educational segregation.

JEL Classification: R00, R20, R23

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As mounting social maladies such as depopulation, population ageing, agricultural decline, and public infrastructure cutbacks threaten the socioeconomic viability of mountainous regions, access to information and communication technology (ICT) is increasingly promoted as a tool to drive socioeconomic development. As a result of ICT adoption disparities between rural-urban areas, the e-Japan Strategy has focused on providing access to ICT through telecommunication infrastructure reforms. This paper advances the debate to examine the ends of ICT use, utilizing the social inclusion framework to examine how ICT engagement can improve the social quality of mountainous region community residents by strengthening the ability to participate in society. We then employ the social capital concept as a theoretical backdrop to examine how engagement with ICT impacts existing social processes. For this analysis, we draw on the findings of a case study conducted in a mountainous region community in Kanakura Village, Wajima City, Ishikawa Prefecture. The case study findings showed a strong relationship between bonding social capital and ‘old' ICT such as face-to-face communication, and a strong relationship between bridging social capital and ‘new' ICT, such as the Internet. The case study pointed to the need for johoka policies to incorporate measures that support old as well as new ICT.

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The area surveyed was Nagoya City Kanayama Terminal Station, a major transport centre established in 1989, currently with about 350,000 daily passengers of which approximately 70% are commuters. The city built a dynamic commercial center near the north entrance of the station. After the initial proposal and competition in 2003, the municipal corporation established a 15 year fixed-term leasehold and Asunal Kanayama was opened in March 2005 with 60 commercial facilities, a bus depot and taxi stands, and a three-story car and bicycle parking facility.
Questionnaire surveys were conducted targeting visitors and this paper describes the differences between weekday and weekend visitors and their shop-visit patterns. The survey results showed from an attribute analysis that (1), visitors were mainly groups of families and friends shopping, eating and drinking on holidays, whereas on weekdays visitors consisted of office workers, many housewives and unemployed people, confirming the facilities attract a wide variety of customers. (2) The higher levels of the complex had a lower passage ratio but events and popular restaurants increased the number of visitors with a marked increase in shops visited, unscheduled visits, hours stayed and distance walked on holidays when, compared to weekdays. (3) The analysis results also showed new visitors were active in 3-Dimensional Shop-around behavior.

JFL Classification: L82, O22

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A common trend towards balance in regional inequalities is measured from the view of convergence of macroeconomic magnitudes. This paper analyses the Spanish regional disparities through synthetic indexes of sustainable development. By comparing the indexes of regional convergence obtained in the scope of sustainability with the values that are reached in traditional terms of GDP variations, we can show[DT1]empirically the validity of the dilemma between sustainable development and economic growth.

JEL Classification: O1, Q5, R1

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