Econometric Analysis of Regional Economy

Chapter 1 describes the relationship between regional economics and regional economic analysis in Japan, and outlines some relevant case studies based on regional statistical data and econometric analysis methods. This is also where my ideas and research positions in this book are initially presented.

Chapter 2 estimates the total fertility rate (TFR) of employed women by industry sectors in Japan and its 47 prefectures for the 16 years 2000 - 2015 using the Own-Children Method. Among non-employed women, it is found that the TFR was maintained at a steady level. Another finding is that the tendency to marry later continued to progress during this period. By industrial sectors, the following results appear from the estimates. Industrial sectors with relatively high TFRs are agriculture, forestry and fisheries, government, construction, electricity, gas, heating and water, and medical, health care and welfare. Sectors with lower TFRs are wholesale and retail trade, accommodation and hospitality services, and transport and deliveries. The problems faced in attempts to reverse declining birthrates may become clearer after examining wage levels, work regulations, and working environments in industrial sectors with higher and lower TFRs. One effective way of countering the shortfall in the number of births may be to work toward policies that make it easier for women to have more children specifically in those sectors where female employees are numerous and TFRs are low. One of the measures against the declining birthrate may be to work by making policy to increase the number of births in the industrial sector with a large female working population and low TFR. With this in mind, TFRs across industrial sectors are of key importance for considering improvements in women’s working environments and choices, as well as from a demographic perspective.

The study presented in this chapter 3 estimates the tourism demand function of international visitors to Japan. The purpose of this is to analyze the impact of congestion phenomena on foreign visitors and to discover which economic variables affect their numbers. The demand function for international visitors to Japan was estimated by considering the TALC model for the top 9 prefectures and for the 6 prefectures with the largest number of international tourist visitors. From this, it was found that the effect of the number of visitors is sustainable in the prefectures where international visitors are most numerous. In the most popular tourist areas, however, it was found that TALC theory factors of reputation and congestion have a negative effect in following years. On the other hand, the elasticity of income in the country of origin is a positive influence, and the numbers of international visitors traveling to Japan will depend greatly on the incomes in the countries of origin. Further, the numbers were also affected by price changes. It seems that the reputation of tourist destinations will affect the future behavior patterns of international visitors. If so, governments, local governments, and tourism operators in popular destinations need to devise measures to reduce congestion phenomena.

Chapter 4 examines recent advances in wind power generation in the different regions of Japan, and finds a positive cost-benefit balance in favor of the expansion of generation capability.　The aim of the chapter is to analyze the effective use of the natural environment for wind power generation and to compare regional initiatives in this activity area, using existing survey results of wind power generation facilities in Japan and established research methods. First, an overview is offered of the current state of wind power generation and of the purposes and challenges of moving into this new area. This is followed by an analysis of the amount of wind power currently generated, the CO2 reduction effect, and the economic efficiency. In addition, the ripple effect of the construction of wind power generation plants on regional economies is analyzed, including the employment aspect.

The overall impact of disasters on local economies varies in the extent and absolute severity of the damage sustained depending on the scale of the disaster, the level of production activity, and the local industrial structure. In Chapter 5, I attempt to identify factors that affect companies' decisions to use a port such as Nagoya and to review circumstances that might lead to changes of choice, including options of ports in other areas. I will focus particularly in this study on factors relating to natural disasters and countermeasures, first summarizing the investments required to ensure the port’s safety and resilience against risks of major disasters and then analyzing the further impact they have on the Nagoya region. The results of the initial survey show that the factors most important in favoring the choice of Nagoya for exports are lower logistics costs, lower domestic transport costs to the port and lower port costs overall. For imports through Nagoya, the factors of importance are similarly lower domestic transport costs from the port and lower total port costs. For the contingency of some natural disaster making the port at Nagoya unavailable, many local companies would consider a change to Osaka or Kobe, but those without any plan for an alternative account for as much as 59% of the total. The analysis of the local economic ripple effects of port disaster prevention projects shows that the production inducement coefficient of these is 1.5 for the local prefecture (Aichi), as compared with 1.9 for the rest of Japan. The total employment effect as projected in the 2012 Aichi Prefecture budget is a plus of 1,616 jobs.

The final Chapter 6 provided an overall summary and a list of remaining issues, to indicate the direction of future research tasks.The 2-4 chapters applied this approach to four key issues of the regional economy: the decline in the total fertility rate (Chapter 2), which is connected via demographics to the fabric of social structure, tourism as an industry that interacts with population (Chapter 3), and the sustaining resources of energy (Chapter 4) and social capital (Chapter 5). If the issues in Chapters 3 and 4 meet in a concern for a sustainable environment, the resources in Chapters 4 and 5 also meet in their common role as public goods. For each of these issues and chapter topics, different analytical methods were also brought.It is true that this small number of studies brings its own limited topic span, and I will need to extend my research to more regional problems in the future.