Since its foundation more than 50 years ago, regional science became an applied field. But applied regional science is still weakly epistemologically grounded. With the evolution of modern societies, taking more into account the people and their environment, questions are raised on its ideologies and basic concepts. As such regional science is not objective but a construct.
This paper deals with the epistemological foundations of regional science, to show its scientific limitations and to propose a behavioral approach to be closer with the views of people, the ultimate objects of planning and investments decisions.

View full abstract

What does sustainable development mean ? There are many definitions of sustainable development, but they are often incompatible. At the risk of oversimplification, we can distinguish two broad ideological groups in environmentalism. One group pursues expansion of consumption for economic growth, and the other group tries to limit consumption for conservation of the environment. The result is no change. That is why sustainable development is unable to progress.
The purpose of this paper is to determine the goal of sustainable development while focusing on GDP growth. Therefore, we consider policies for sustainable development with a simple dynamic two region economy model and the extended framework of Krugman (1981) to add renewable resources as a factor of manufacturing production.
The Krugman model portrays a two-region world in which the industrial sectors of the regions grow through the accumulation of capital. However, a crucial assumption is that there are external economies in the industrial sector. The Krugman model shows that ‘uneven development' is a necessary outcome in such a model because an initial discrepancy in capital-labor ratios between the two regions cumulates over time and leads to a division of the world into a capital-rich industrial region and capital-poor agricultural region.
In this paper we assume that natural resources are essential for manufactured production. Then we analyze a dynamic growth model of a two region growth model to determine the conditions of sustainable development. The dynamic growth model shows three key conditions for sustainable development: (1) abundant renewable resources in a country, (2) an elastic resource price of the resources and (3) restrictions in the trade of renewable resources between rich countries and poor countries.

JEL Classification: Q20, Q27, O56

View full abstract

Highway construction projects in practice are evaluated by measuring user benefits based on a cost benefit manual. Recently, the measurement of indirect effects that revitalize industry by freight efficiency or relocation effects of new industries is requested to add direct effects such as user benefits. However indirect effects may be canceled out through market mechanisms, so it is important to avoid double count and calculate the net benefits. We built a Computable General Equilibrium (CGE) model to considered long term interactions of transport and location changes to evaluate the relocation effects brought by transport projects. Application of the CGE model can strictly evaluate the cancelation of effects and exclude the double count of benefits. In addition, we can evaluate relocation effects of new industries because the model is able to consider relocation impacts by transport projects. In this paper, we apply the benefits evaluation model to the Radial and Ring Road Projects of Sapporo City and execute an actual analysis.
The numerical results clarified that the Radial Road affects the central area, and the Ring Road affects not only the central area but also the suburban area. In detail, benefits, household and firm location distribution, commodity consumption and production, rate of price reduction and other factors were obtained. Based on the benefit evaluation, the Ring Road Project may bring more benefits than the Radial Road Project.

JEL Classification: R13, R14, R42

View full abstract

Under the scheme of Japanese City Renewal Law (JCRL), the cost of urban redevelopment projects is financed by revenues from selling reserved floors secured beforehand in a redeveloped building. The outcome of whether the reserved floor can be sold is unforeseeable, so entities for redevelopment are faced with risks in project financing. Defining the risks for the entities as a probability of loss and formalizing the urban redevelopment process as a game theoretic model, this paper aims to demonstrate that we can evaluate the actual risks entities will bear in a project by showing a hypothetical numerical example. The game theoretic model for urban redevelopment procedures was first constructed by Imanishi, Saito and Tanaka[1]. They attempted to evaluate what risks would be transferred from the Urban Renaissance (UR) Agency, a government entity for redevelopment authorized by JCRL, to the private sector if UR employed a new contract scheme under which UR delegates the disposition of the reserved floor to the constructor that makes a contract with UR to construct the redeveloped building. The model was formalized as a two-stage auction implemented by the entity for redevelopment. The first auction is carried out as a sealed bid lowest price auction to choose a constructor for the redeveloped building, and the second stage chooses a buyer for the reserved floor as a sealed bid highest price auction. They theoretically derive the risk born by the entity for redevelopment from the hypothetical case when true preference distributions for buyers and constructors are uniform distributions. While their derivation is innovative, they have derived the result for just one of four possible cases. In this paper we demonstrate derivations for all four cases to complete the risk calculation.

JEL Classification: D44, D82, O22, R51

View full abstract

This paper investigates returns to scale estimated by the production function of the public water industry in Nishinomiya City, Hyogo Pref., Japan. In terms of the characteristics of a water industry, the estimation adopted the following three improvements by comparing with previous works ;
1. defining estimation sample unit not as “city” but as “water treatment plant and its distribution network” in a city,
2. dividing the capital into “water intake and treatment related capital,” “water distribution related capital” and “other capital” for specifying the effects of a water network to the returns to scale,
3. adopting quality-graded water volume as the output of the production function.
The result of estimation with the improved production function does not indicate positive returns to scale. Three improvements applied in this paper could be effective implications to analyze the recent discussions on inter-city joint operations or privatization of the public water industry, because factors should focus on these topics that vary within a city and within a water distribution network.

JEF Classification: D24, L32

View full abstract

In an attempt to shed new light on the role of geography in technology diffusion among industrial sectors, this paper studies how spatial effects guide the diffusion of technology in the European Union. The focus of this paper is on the measurement of the productivity of new technology among different industrial sectors. Actually, it provides a systematic analysis of the relationship between universities and firms in automobile, chemical, electro-technology and manufacturing industries that generate economically useful new technological knowledge. Empirical results suggest that strengthening R &qmp; D activities of universities and industries boosts regional economies in terms of spatial heterogeneity.

JEL Classification: C2, O4, R0

View full abstract

The purpose of this research was to estimate the economic, allocative, technical, pure technical and scale efficiencies of rural cardamom farms in the hilly region of Nepal. Data Envelopment Analysis (DEA) was used to estimate the efficiency scores. Additionally, Tobit regression was also used to explain the variation in the efficiency scores related to farm-specific factors. The efficiency scores of 100 surveyed cardamom farms revealed that the economic, allocative, technical, pure technical and scale efficiencies were an average of 52, 58, 90, 95 and 96 percent, respectively. The results indicate there can be substantial reduction in inputs and the same level of output can be achieved with the existing technology. In addition, the Tobit regression analysis showed a positive significant effect on efficiencies attributed to farm-specific variables, such as cropping year, credit use, women participation, training and off-farm income. To enhance the efficiencies of rural cardamom farms in the hilly region of Nepal, major policy implications should include adequate government arrangements of credit, training programs, encouragement of women participants, and increasing off-farm income sources.

JEL Classification: Q12

View full abstract

The agricultural sector can be protected either by tariffs or subsidies. Most developed countries have moved away from tariffs to subsidies, which are supposed to be more economically efficient, but Japan remains extensively reliant on tariffs for agricultural protection. As such, there is a large gap between what is prescribed by the orthodox trade theory, which suggests a combination of tariff elimination and compensation through lump-sum subsidies as the best policy mix for economic welfare, and what is actually pursued by Japan. Despite such a gap, existing literature on the political-economy of agricultural protection has mainly focused on the ‘level' of protection and rarely addresses the ‘choice' of instruments either tariffs or subsidies. Against this background, this article explores the determinants of tariff dependence in agricultural protection through a regression analysis using panel data for 10 OECD countries to identify the reasons why Japan continues to reply on tariffs as a means of agricultural protection.
Hypotheses explaining the preference for tariffs over subsidies to be verified are threefold: (i) ‘revenue motive hypothesis' emphasising the budgetary constraints by governments or lower collection costs of tariffs, (ii) ‘incomplete information hypothesis' arguing that taxpayers understate social costs of tariffs and overstate those of subsidies, (iii) ‘collective action hypothesis' focusing on the collective good nature of tariffs that lead to free-riding among interests groups, lower lobby competition and smaller welfare losses. Their validity is verified based on the statistical significance of coefficients in a single equation estimated by the OLS, with the dependent variable being tariff-dependency ratio (share of tariff protection in total agricultural protection). Independent variables include (i) government debt ratio and income tax dependency ratio as proxies for revenue motive hypothesis, (ii) tertiary attainment ratio and newspaper subscription ratio as proxies for incomplete information hypothesis, (iii) voter turnout in parliamentary elections and concentration ratio of dominant agricultural commodities as proxies for collective action hypothesis, and (iv) trade dependency ratio and exchange rates against US dollar as control variables.
The regression analysis reveals that the revenue motive and incomplete information hypotheses are validated given that the coefficients of government debt ratio and tertiary attainment ratio are statistically significant with the expected signs. However, the collective action hypothesis is not supported. Trade dependency ratio as a control variable is also statistically significant with the expected sign. A growth accounting analysis of individual countries based on these statistically significant explanatory variables shows that Japan's consistently high tariff dependence is largely explained by increased government debt ratio. This result implies that Japan's salient increase in budget deficit makes it difficult to transform its agricultural protection from consumer-borne tariffs to taxpayer-financed subsidies due to budgetary constraints. Consequently, it will be indispensable to secure stable revenue sources to be devoted to compensatory subsidies for producers without relying on tariff revenues if Japan is to move away from tariff to subsidy protection.

JEL Classification: F13, H29, Q17, Q18

View full abstract

In this paper, we focus on the following four traditional carpentry companies: Kongo, Takenaka, Daihiko and Matsui. Kongo was founded in 578, about 1,400 years ago. The first leader of the Kongo company was Shigemitsu Kongo from a part of modern day Korea called Baekje. Three carpenters from Baekje, Hayami, Nagamichi and Kongo, were invited in 578 by Prince Shotoku to Japan to build temples. They greatly influenced building construction in Japan. Takenaka, Daihiko and Matsui were respectively founded in 1610, 1704 and 1586, and they are all still doing good business today.
The purpose of this paper is to explore the interdependence between regional economies and long-standing companies in Japan, and through case studies, identify factors that contribute to the continuous growth of long-standing companies. The regional economic growth and function of Miyadaiku (traditional temple carpentry) is discussed. The relationship between a regional economy and managerial behavior is also discussed with focus on the companies of Kongo, Takenaka, Daihiko and Matsui as good examples of Miyadaiku. We will elucidate their long-term relationships with customers, which have made the passing down of carpentry expertise very smooth for many generations.
Each of the four companies mentioned above has revitalized regional economies and contributed to their regions by supporting local industries and providing employment, as well as maintaining local shrines and temples. Business actions based on region-customer relationships are the largest contributing factor to their long existence. These findings suggest the need for further consideration of glocalization. A balance between the global market economy and local/regional economies should be carefully examined. A more detailed analysis of European long-standing firms such as Freiherr von Pschinger, Barovier & Toso, and Beretta will be left for future research.

JFL Classification: M14, N85

View full abstract

With the emergence of biodiesel and the need to improve the socioeconomic situation in Indonesia by developing the oil palm sector, an analysis is needed to determine whether conditions have actually improved. Using accounting multiplier decomposition and structural path analysis for a simulation of one unit increase in biodiesel's production, this paper aims to empirically analyze whether the emergence of the biodiesel industry has impacted the oil palm sector in Indonesia. Decomposition captures various mechanisms and linkages within a socioeconomic system by a social accounting matrix (SAM). Structural path analysis identifies the transmitted influence network within SAM. Our results show an indirect effect on oil palm and improvement in the economic conditions. Therefore, development of the Indonesian economy depends upon the integration of biodiesel production and oil palm expansion through sufficient incentives and government financing.

JEL Classification: Q15, R15, R58

View full abstract

In this study, we examined how to smoothly process and implement the initial emission permit allocation when an emission trading system is introduced into China. The optimal allocation for emission trading was investigated based on the social background of water pollution, social demand and complicated trans-regional problems.
According to the principles for initial emission permit allocation (fairness doctrine and efficiency doctrine), we selected 31 provinces in China as the targets and assumed a constraint as total quantity of COD in China to carry out the simulation. First, the Gini coefficient method was adopted and the indexes of population, GDP, water resources, usage of water resources, area of land, employed population and tax were selected as the evaluation system to assess the fairness doctrine allocation. Second, the environmental simulation analysis method was adopted to evaluate the efficiency doctrine allocation. The simulation model consisted of one objective function to minimize the reduction costs of COD water pollutants and restriction functions to achieve optimal emission allocation for different regions in China.
The following conclusions can be made based on the analysis of initial water pollution permit allocation with the introduction of a emission trading system. First, the indexes of population, GDP, usage of water resources and employed population should be selected to allocate initial water pollution permits and satisfy the requirements of the fairness doctrine. Furthermore, when the allocation of emission permit satisfies the requirements of the fairness and efficiency doctrines, water pollutant reduction can be achieved with constraints on the minimum reduction in cost.

View full abstract

In this paper, I consider the influences of population decrease on Japanese communities. A community is a “place” where people live and carry on social functions such as production, education and culture to get income and jobs without considering geographical and natural environments. Therefore, to consider the influences that population decrease have on a community, we must generally consider the influences of the above and other related functions. We must analyze a very wide range of influences from the influences on industry and on local finance to social symbiosis involving foreigners. In this paper, the analysis does not focus on a specific theme, but the influence that population decrease has on the community is generally evaluated though the concept of “sustainability”.

JEL Classification: C82, J00, O29, R00

View full abstract

Until now few studies have been carried out on the use of biodiesel fuel refined from used cooking oil (hereafter BDF) as motor car fuel. Most of these studies adopted an empirical approach to study BDF generated from used cooking oil. The used oil was usually collected and recycled by various municipalities and civilian organizations. However, no study has been carried out to evaluate the impacts of the use of BDF on the environment as well as on the overall profit system.
In this study, the amount of CO₂ reduced through use of BDF for one year from April 2005 to March 2006 in Ibaraki Prefecture (the study area) was calculated. Moreover, the rate of mixing BDF with light oil for use, and distribution and promotion in Ibaraki Prefecture was considered. In addition, the amount of used cooking oil thrown down the drain during the year was calculated by obtaining information on the amount of used cooking oil processed in the sewage system from the Ibaraki Prefecture authorities. The reduction in CO₂ emission from using BDF was also calculated. Finally, the social costs of the quantity of CO₂ emissions were evaluated from the price of CO₂-t in the emissions.
Results of this research, show that the amount of used cooking oil generated in Ibaraki Prefecture from April 2005 to March 2006 was 7,811.1 t (8.67 million liters) from which 7 million 803 thousand liters of BDF was produced. Moreover, a mixture of 1% BDF with light oil consumed during 2005 and 2006 reduced CO₂ emissions by 19,500 tons.

JFL Classification: C80, Q20, Q28, Q25

View full abstract

Recently, arsenic contamination of drinking water has become a serious problem in Bangladesh. Arsenic causes skin diseases, cancers, and in the worst case, death. Bangladesh is one of the poorest countries in the world and has suffered many disasters such as cyclones, floods, droughts and damage caused by salt. Therefore, Bangladesh is a fragile area affected by arsenic problems. Since the revelation of arsenic contamination, various alternative technologies have been introduced to supply safe drinking water. However, some have already been abandoned because of a lack of knowledge about proper use, difficulties of maintenance, bad taste of water and stress of collecting water. For the mitigation of arsenic contamination of drinking water in Bangladesh, it is important to take into account the social environment and the situation of drinking water use and options that are acceptable to local residents.
Recognizing the above, the purpose of this study aimed to clarify the social environment and situation of drinking water use to obtain indicators for planning of disaster mitigation for arsenic contamination of drinking water in Bangladesh based on the local social environment. First, to clarify the social environment and water supply, a questionnaire survey was carried out in 3 rural villages. From the simple aggregation data, the differences in social environments and situations of drinking water use were determined. Second, the Cramer's coefficient of contingency clarified that the correlation between usage of water and recognition of arsenic problems are different. Finally, applying a factor analysis, common factors were derived for the situation of drinking water use and acceptability of local residents for water use. In addition, indicators for acceptable planning processes on disaster mitigation for arsenic contamination were obtained by structural equation models.

JFL Classification: I18, I32, L31

View full abstract

In this study, the impacts of new Shinkansen lines to be constructed in Aomori Prefecture and Donan District, the south part of Hokkaido, were estimated in terms of travel demand between the two districts. First, the travel demand between districts after the construction of new Shinkansen lines was estimated. Then, the number of passengers expected to use the six new Shinkansen stations was estimated. For the travel demand estimation, generalized costs of travel, population of a district and economic growth were explanatory variables. Since the generalized cost was expressed by travel fees and travel times on the Shinkansen and in the air, the travel demand between the two districts was estimated taking into account change in mobility brought by the new Shinkansen lines. The numbers of passenger using the new Shinkansen stations was lastly estimated by using the modal share of the Shinkansen. The results clarified that most of the new Shinkansen stations would have an increased number of passengers even with a decreased population in the future. However, the new Shichnohe Shinkansen station to be constructed in Aomori Prefecture would have a decreased number of passengers when compared with the present railway station, Noheji station, due to the inconvenient access to the Shinkansen station from the center of the district.

View full abstract

Current regional studies in business indicators focus mainly on the estimation of an indicator itself to reveal regional business cycle, and at best, comparison with a national indicator or those of nearby regions. This paper employs a business indicator from a different point of view to verify some stylized facts of regional economy with statistical methodologies. The paper at first estimates a stochastic regional business indicator of Stock-Watson type in Nagasaki based on existing methodology, and has succeeded in estimation. This indicator is not utilized only to reveal business cycle but also to verify some stylized facts in the region, such as weak recession in 2001 that Nagasaki Tankan unveils, and moreover, whether shipbuilding and sightseeing industries lead Nagasaki economy or not, employing Granger causality analysis.
For estimating a regional business indicator in Nagasaki, this paper employs the large industrial power consumption as a proxy for the production; the effective job offer rate for the labor condition; the sales value at department stores deflated by the consumer price index to volume for the consumption; and, the index of real wage for the income. These proxies are represented in a state space model for estimating the only and latent business indicator, which is named Nagasaki Regional Business Indicator (NRBI) in the paper. The state space model has been solved by the Kalman filter to obtain NRBI.
NRBI indicates very clear business cycle in Nagasaki compared with all-Japan business cycle indicator which is calculated by the Cabinet Office of the Government of Japan and named Composite Index (CI). NRBI reveals declining tendency and very weak recession in 2001, which strongly supports results of Nagasaki Tankan. Moreover, utilizing NRBI to unveil Nagasaki business cycle, Granger causality analysis is adopted among NRBI, CI, order backlog of the shipbuilding industry and the number of visitors to Glover Garden that is a proxy for sightseeing. The results suggest that all-Japan CI proceeds NRBI and also that the shipbuilding industry leads Nagasaki regional business at one percent level of the statistical significance, while the relationship between the number of Glover Garden visitors and NRBI is ambiguous.
After estimating NRBI and analyzing Nagasaki economy, the paper concludes briefly and points out three issues remaining. The first is what exists on the background for the Nagasaki's weak recession in 2001. It might be required to take another approach including episode analysis. From a viewpoint of business cycle, the second should be the estimation based on more advanced methodology. The third is to explore another way to utilize NRBI. Finally, the paper stresses widening utilization of regional business indicators, which may promote development of indicator estimation.

JEL Classification: C32, C43, E32, R10, R11, R15

View full abstract

Jiaxing is a major city in China's Zhejiang Province located in the hinterland of the Hang-Jia-Hu Plain, which is a central region in the Yangtze River Delta. Jiaxing has clear geographical advantages with Shanghai to the east, Hangzhou to the west, Suzhou to the north and Hangzhou Bay to the south. Jiaxing is less than 100 kilometers from these cities, and covers an area of 39.15 million square meters with a population of 3.7 million. However, the economic level of Jiaxing is actually far lower than Shanghai, Suzhou and Hangzhou, which form an “economic basin”. Why has Jiaxing not benefited from its geographical advantages ? This article employs a statistical comparison method to analyze this “Jiaxing phenomenon”, and attempts to determine the intrinsic reasons behind the economic backwardness. After determining these reasons, the study presents a number of development policy proposals.

JEL Classification: R10, R30

View full abstract

Now we are cognizant of tightening budgets and increasingly more reviews of public expenditures, so there is a need for an objective analysis of the performance of public bodies in terms of efficient execution of their tasks. Questions occur throughout the public domain, for instance, in the provision of medical facilities, the operation of postal services, and especially the supply of public transportation.
The management environment surrounding public transportation is growing increasingly severe in recent years. Public transportation authorities implement strategies to improve management efficiency. Data Envelopment Analysis (DEA) has become an established approach in the analysis of efficiency problems for both public and private sectors. In the past few years, much progress has been made to extend this approach in various directions.
This study newly proposed a NCN-CD model in DEA that integrates a non-controllable variable (NCN) model and a context-dependent (CD) model. The NCN model can analyze an efficiency problem when some of the inputs or outputs are exogenously fixed and beyond the discretionary control of Decision Making Units (DMU) managers. The CD model refers to a DEA approach in which a set of DMUs are evaluated against a particular evaluation context. Each evaluation context represents an efficient frontier composed by the DMUs at a specific performance level. Each efficient frontier contains a possible target for a specific DMU to improve its performance. The CD model yields efficient frontiers at different levels, while being based on a level-by-level improvement projection.
In this study, we set DMUs for 9 city transportation authorities and 16 major private railway companies in Japan. Input items were operating costs, and total asset of the DMUs. Output item were the operating revenues of the DMUs. The non-controllable variable was set as the total assets. The above-mentioned NCN-CD model was applied to the data with the aim to measure and improve the efficiency of management in these authorities and companies based on the inputs and outputs.

JEL Classification: R40, C44

View full abstract