As described in this paper, a simple matching theory is constructed to ascertain the manner by which natural disasters affect regional economic activities and migration. First, a simple matching theory model based on previous studies is introduced. Then, elements of natural disasters are integrated into the model. It is assumed that agglomeration increases not only productivity but also congestion costs. When a natural disaster affects an area, production factors are decreased, thereby reducing productivity. Consequently, people move from affected areas to other cities:population drain occurs. Next, the model is extended to analyze regional loyalty. Presuming that the utility difference between the domicile and other regions is low, then people tend to remain in their hometown even if monetary gains can be made by migrating to other areas. In that case, multiple steady states exist. Lastly, we assume that productivity depends on public capital, which is degraded by a natural disaster. Results show that once migration and a population drain occur, fiscal policies to recover public capital may degrade the regional economy further and might engender further population outflow.
JEL Classifications: C78, Q54, R11, R23
This paper aims to investigate interregional commodity flows linked to the current transportation network of the San-En-Nanshin Region in Japan. Since spatial units may differ in important characteristics such as size, homoscedasticity is a very strong assumption and may not hold in empirical cases. For this reason a heteroskedastic version of the conventional spatial interaction models was considered to test the presence of network dependence among commodity origin-destination flows. The empirical results show that network dependence affects modeling interregional flows and can be successfully captured by employing a Spatial autoregressive model with autoregressive disturbances (SARAR model) using generalized spatial two stage least squares (GS2SLS) estimation procedures. We also show that the indirect impacts of explanatory variables are significantly dominant with respect to the direct impacts in term of their magnitudes reflecting the presence of strong spatial autocorrelation. In addition, the highly significant total impact of travel distance in time on commodity flow emphasizes the paramount role of transportation connectivity in interregional freight shipments.
JEL Classifications: R12, R15, R41
Sericulture, as with animal husbandry, is a form of agriculture in which satisfying the demand for intermediate input is crucial for successful management. Quantitative studies on sericulture during the prewar period of Japan paid little attention to the functions and the limitations of the mulberry leaf market, because sericulture farmers at that time generally managed mulberry gardens themselves. However, some historical records show the existence of local mulberry leaf markets in many of the sericultural regions of prewar Japan. To fill the gap, we conducted micro-econometric analyses using a unique data set obtained from the “Record of Sericulture Management Survey”. The analyses investigated the main factors of the market imperfections that resulted in the existence of autarkic mulberry leaf farmers, and also evaluated the leaf input efficiency for farmers who participated in the market.
First, we consider two causes of market imperfections:a price difference between the purchase and selling prices of leaves in the market and differences in the quality of self-produced and purchased leaves. The data show that a price band existed in the leaf market. At the same time, the literature shows that the leaves of the mulberry species cultivated in Japan deteriorate more easily than species in China, where a more active mulberry leaf market was observed during the prewar period. The agricultural household model suggests that both factors can result in the existence of autarkic farmers. Therefore, the main cause of the market imperfection is an empirical question.
To investigate differences in quality, we estimated the production function of cocoons to detect a difference in productivity between self-produced leaves and purchased leaves. No significant difference was detected in the productivity, even after controlling endogeneity and selection bias. The results suggest that the low quality of purchased leaves is not the main cause of market imperfection.
If the price band is the only reason for the market imperfections, the input of mulberry leaves by farmers who participate in the market was efficient;the marginal value of mulberry leaves for the net buyer （seller） of leaves is equated to the purchase （selling） price. A strict test for this hypothesis was rejected, but a more generous test was not rejected. The marginal value product of leaves for the net buyer （seller） is not far from the purchase （selling） price. Therefore, we concluded that the price band was the main reason for the existence of autarkic farmers. Once participation in the leaf market has become optimal for sericulture farmers, the market allows them to adjust for excesses and shortages of mulberry leaves in the individual farm economies. However, regression analyses also suggest a quantitative limitation in the market. Farmers who had a relatively high demand for their leaves compared to their supply abilities may have not been able to satisfy the demands to achieve efficient sericultural management.
JEL Classifications:C23, D13, N55, O13, Q12
The supply systems of various public goods are changing with differences in socioeconomic circumstances. However, it is necessary to clarify the relationships between the characters, non-excludability and non-competitiveness, of greenery as public goods and their supply to determine how supply and by which sector, public or private, these characters are being changed.
In this study, we concentrated on the relationships between the existence effects and the supply of private-owned greenery by the public sector. That is, through examining the descriptions of public documents about private-owned greenery from the view point of the existence effects such as environmental preservation, landscape, recreation and disaster prevention in Saitama City, we considered the relationships between the existence effect and the supply of private-owned greenery to the public sector.
As a result, various existence effects are described to explain the necessity of public supply for private greenery. Particularly, the description numbers for excludability and competitiveness greenery were higher than others. There is more description of “landscape” in supply to management than installation, and the description number for regulation is higher than for other means.
Greenery has exteriority as the existence effect, and is a basis of public supply for private goods. There are various systems, so descriptions are also various and sometimes vague. Vagueness may influence the quality of the greenery. Therefore, it is necessary for descriptions in public documents to be consistent.
JEL Classifications: H41, H23, R59
How does a local government’s fiscal consolidation affect the population ? This paper provides a case study of Izumisano City, where there has been a long-term attempt to improve fiscal conditions. The economy and financial sector of Izumisano City have previously faced shocks from two fiscal crises. The first was the spontaneous declaration of a fiscal emergency at the end of FY2003, and the second was the forced designation by the central government of a “fiscal consolidation municipality” in FY2009. These crises led the city to make new plans for fiscal consolidation. The analysis presented in this paper confirms that the benefit-cost ratio of public service provisions declined in the fiscal year following each of the two crises, relative to two groups of similar municipalities.
Using population data from the Japanese basic resident register, three features of population changes due to the two fiscal crises were identified:（1） the rate of net migration decreased relative to similar municipalities, （2） immigration was more responsive to the crises than emigration both in rate and timing of change, （3） the previous trends of larger population increases in younger generations compared to similar municipalities disappeared under stronger fiscal consolidation.
Special mention should also be made of the finding that the decrease in the immigration rate occurred prior to decline in the benefit-cost ratio that was clearly observed in forced designation as a “fiscal consolidation municipality” in FY2009. This result shows an announcement effect:the designation by the central government influenced the actions of potential immigrants prior to the negative policy impacts were felt, leading to avoidance of immigration to Izumisano before the fiscal consolidation was strengthened.
The question posed by this analysis is to what extent the two fiscal crises reduced the population growth in Izumisano City. The results of the shift-share analysis, controlling for differences in age composition between the regions, shows that the two fiscal crises reduced the population growth rate by 0.2 to 0.5 percentage points per year.
JEL Classifications: H31, H72, R23