Fumitoshi Mizutani explains the main regulatory structure and regulatory reforms in eight Japanese public utility industries: electric power, gas utility, water supply, railway, local bus, postal service, telecommunications, and broadcasting
AbstractWe provide a theoretical framework to discuss the relation between market size and vertical structure in the railway industry. The framework is based on a simple downstream monopoly model with two input suppliers: the labour force and the rail infrastructure firm. The operation of the downstream firm (i.e. the train operating firm) imposes costs on the rail infrastructure firm. We show that the downstream firm with a larger market size is more likely to integrate with the rail infrastructure firm. This is consistent with the phenomenon in the railway industry.
Unlike the expressway systems of the U.S. and Europe, where road use is largely free of charge, the Japanese expressway system consists mostly of toll roads. The toll expressway system was instituted after World War II to expedite construction of a nation-wide expressway network. Originally it was intended that the system ultimately become free of charge, as soon as the national expressway network was completed and construction debts repaid. Although expressway tolls are collected based on each individual route, tolls are included in the same budget and pooled for the construction of other routes, in what is called a pool system. However, problems have occurred in such a system. Expressway users have been required to continue paying expressway tolls along trunk expressways near big cities where construction costs have long been completely repaid. Furthermore, in rural areas where the demand for expressway use is low, the system continues to construct expressways simply because rural residents expect them to be constructed. Users have also been dissatisfied with the high price of expressway use, attributing the cost to what they have perceived as the monopolistic nature of the public corporation system, which, like the former Japan National Railway, had no competition. In this environment, Prime Minister Koizumi appointed a special committee to define the role of the Japan Highway Public Corporation and to determine whether or not it should be privatized, and the issue of highway privatization became controversial in Japan. Although there were effective arguments pro and con, it was decided that the corporation be privatized. In October, 2005, the Japan Highway Public Corporation was privatized and separated into three expressway companies, and the following companies were also privatized: the Metropolitan Expressway Public Corporation, the Hanshin Expressway Public Corporation, and the Honshu-Shikoku Bridge authority. The main purpose of this study is to assess the privatization policy taken by the government. The aspects which we will especially focus on are (1) ownership, (2) regional subdivision, (3) cost structure, (4) investment behavior, (5) pricing system, (6) management and incentive system of internal organization, (7) public regulations, and (8) political intervention. We will evaluate these aspects comparing the before-privatization and after-privatization periods of the Japan Expressway Public Corporation. As the performance results of the new organization are not available yet because privatization is quite recent, our conceptual outcomes will be based on theory and the lessons learned from the privatization of the Japan National Railway.
Inefficient use of public money is a policy issue of concern in Japan. Some contend that spending towards the formation of public capital does not promote economic growth, one reason being that such investment is concentrated in underdeveloped regions which have a low impact on the growth of economic activity. Investment in underdeveloped regions might be the result of political misallocation or simply the fact that public capital no longer contributes to private productivity. Our study addresses these two important issues: whether or not public infrastructure contributes to production in the private sector, and whether or not political factors really affect the allocation of public infrastructure investment. If the political factors indeed affect allocation, what kinds of political factors are the most deterministic? First, we survey studies on this topic published since the 1970s. For methodology, we plan to take a simultaneous approach to examine these issues. Second, because some data are not publicly available, we construct a data set of public infrastructure and related variables. Public capital in this study is limited to public infrastructure such as roads, ports, airports, banks and dams. Railroads and electric power plants are excluded because these were built by the private sector in Japan. In this study, we plan to use a panel data set covering 46 prefectures and 9 time periods for every 5 years from 1955 to 1995 in Japan. Therefore, the total sample size in this study is 414. Third, after constructing the data set, we overview the regional distribution of public infrastructure and the relationship between public infrastructure allocation and political factors. Last, we estimate simultaneous equations regarding regional production function, infrastructure investment function and grant allocation function. By using these estimated functions, we evaluate whether or not public capital contributes to production and what kind of political factors affect the allocation of public infrastructure investment.
Introduction -- An Analysis of the Effect of Demand Response on Electricity Consumption: Assessing Households' Heterogeneous Reaction to Dynamic Pricing -- Estimation of Tap Water Demand in Japan: A Panel Data Analysis -- Economies of Scale and Consolidation Effects in the Japanese Sewerage Industry -- Productivity Measurement and Decomposition of Total Factor Productivity in Japan's Postal and Parcel Delivery Industry -- Preferential Slot Allocation for LCCs at a Congested Airport, and Airfare: The Case of Haneda Airport in Tokyo -- The Impact of Airport Concession on Technical Efficiency: Evidence from Major Airports in Japan.
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In: CESifo economic studies: a joint initiative of the University of Munich's Center for Economic Studies and the Ifo Institute, Band 69, Heft 3, S. 158-176
Abstract This study investigates the relationship between consumers' evaluation on sustainable development goal (SDG)-related characteristics and the actual payment for these values, while revealing effective governmental policies and business activities to enhance sustainable consumption. Using survey data from the USA, Germany, and Japan, the following results were obtained. First, the relative importance of the core element is 35–41% and that of the elements related to SDGs 8, 9, 12, and 13 dominates 52–58% of the overall product value. Second, effective approaches to enhance sustainable consumption differ among product characteristics. Third, lifestyle influences only the long-term and the medium-term goods. Fourth, while consumers rely on their experience in the choice of short-term goods, they make more deliberate decisions considering their condition factors for the medium-term and long-term goods. Based on these results, some practical implications were derived. First, active advertisement emphasizing the importance of economic aspects and actions for economic goals could be effective. Second, describing the idea that underlies the concept of SDGs could be effective rather than emphasizing each SDG. Third, incentive schemes focusing on daily goods rather than durable goods could enhance sustainable consumption further, as consumers still exhibit limited concern for daily goods. (JEL codes: D12; M20; M30; Q01; Q56; and Q58)
The main purpose of this paper is to evaluate how the form and urban policies of ga compact cityh affect its economic activities. In general, bigger cities have more advantages such as agglomeration economies, but too-big cities have the disadvantages of external diseconomies such as environmental pollution and traffic congestion. Therefore, governments of industrial countries have an interest in promoting compact cities, but empirical evidence regarding how the formation and policies of compact cities affect economic activities is unclear or undocumented. In order to investigate our research question, we will conduct an empirical analysis using data from Japanese cities. As there is no official definition in Japan, we first define metropolitan areas and create a data set of 269 metropolitan areas in Japan for the year 2000. Then we estimate citiesf urban economic models by using econometric techniques. These urban economic models consist of four sections: 1) a compact city section, 2) a labor section, 3) a production section, and 4) a population section. First, the compact city section shows how the cityfs compactness measure is determined. Second, the labor section shows how the numbers of employees, the share of each industryfs employees, and so on are determined. There are 11 industries defined here, including manufacturing, public utilities, retailers, wholesalers, and so on. Third, by estimating the production function, the production section shows the extent of each industryfs economic activity in a city. The production functions estimated here are for 11 industries. Last, the population section shows how the cityfs population is determined by considering degree of economic activities, amenities, and so on. After we estimate several formulas regarding the above issues, we will conduct simulations in order to evaluate how the degree of a cityfs compactness affects economic activities and number of employees in a city. We are also able to determine what kind of factors affect the degree of a cityfs compactness. These empirical results may also be useful in determining policy aimed a achieving a sustainable city size.
Although it has for years had a lower unemployment rate than other industrialized countries, Japan has begun to see an increase in unemployment since its economy was hit by the recession of the late 90's. The level of a nation's unemployment is commonly seen as a barometer of its economy's health, so that Japan's increased unemployment has worried the government and prompted it to consider several policy options. Unemployment rate in Japan varies by region. In general, while large metropolitan areas such as Tokyo have lower unemployment rates, smaller metropolitan areas have higher unemployment. Strangely, however, Osaka, the second largest metropolitan area after Tokyo, is suffering from a high unemployment rate. In October of 2002, the Kansai region including the Osaka metropolitan area recorded an unemployment rate of 7.2%, much higher than the average rate (5.5%). Theoretically, regional differentials of the unemployment rate are attributed to the friction resulting from adjusting for the mismatch between demand and supply of labor markets among regions. These frictional factors consist of the costs of information, moving, transactions related to housing, and psychological costs. Frictional components are important factors but are not all. Industrial structure differences also affect regional differentials of the unemployment rate. This paper investigated the relationship between unemployment rate and industrial structure in metropolitan areas, with the aim of testing the hypothesis that more industrially diversified metropolitan areas have lower unemployment rates. Previous studies have been done on the relationship between industrial diversity and unemployment rate but these do not provide concrete agreement because of the failure to control other factors affecting unemployment rate. This paper follows the theoretical justification of Simon (1988), who argues that industrial diversity attains a lower unemployment rate by assuming that the frictional component of employment fluctuations is a random variable and independent across industries. Because fluctuations are uncorrelated across industries, frictional hiring in some industries may coincide with frictional layoffs at others. Unemployed individuals can fill concurrently occurring vacancies. Therefore, the unemployment rate will be lower in the more industrially diverse metropolis. Simon's empirical analysis of 91 large U.S. SMSAs strongly supports the hypothesis. In this study, we analyze 117 metropolitan areas in Japan for the year 1995. Because there is no authoritative definition of a metropolitan area in Japan, we began by defining metropolitan areas and collected data for each. As for a variable expressing industrial diversity, the Herfindahl index is used, which is made of both numbers of employments and numbers of firms for ten industrial classifications. Other factors used in this analysis are size of metropolitan areas, transportation conditions, unemployment insurance, average schooling length, and so on. The basic equation for the empirical analysis of the relationship between industrial diversity and metropolitan unemployment rate is as follows: Metropolitan unemployment rate = f (Herfindahl index (industrial diversity), metropolitan size, transportation conditions, unemployment insurance, average schooling length in metropolis) In addition to this analysis, we also analyze whether or not a higher location quotient shows a lower unemployment rate. In the preliminary analysis, we found there are negative relationships in almost all industries.