An Empirical Model of Efficiency Analysis on Flood Prevention Investment in Japan

This paper aims to evaluate the comprehensive efficiency of flood disaster prevention investment from 1955 to 1999 by developing and applying an integrated evaluation model. Our analysis results have clarified some important issues currently being discussed in Japan. Firstly, the average values of normalized flood losses decreased greatly between the 1955-1961 period and the 1984-1999 period. Secondly, the ratio of human loss to total loss caused by floods in Japan may be less than 10%, based on the concept of the value of statistical life (VOSL) and values estimated from the risk-money tradeoff. The proportion of intangible effect to total loss increased from less than 10% before the 1970s to approximately 20% after that period. Finally, flood prevention investment in Japan effectively reduced losses caused by flooding before the 1960s; however, since the 1980s, investment has changed from an efficient mode to an inefficient mode, not only from the economic standpoint, but also from that of total flood loss saving.     

Hyperbolic Discounting,Borrowing Aversion and Debt Holding

Analysis of an original Internet‐based survey reveals that debt holding is related to time discounting through: (i) present bias, measured by the degree of declining impatience in the generalized hyperbolic discount function; (ii) borrowing aversion, captured by a sign effect in that future losses are discounted at lower rates than future gains; and (iii) impatience, measured by the overall discount rate. Hyperbolic respondents are classified naïve if their answers reveal them to be time‐inconsistent procrastinators, and otherwise sophisticated. Naïve respondents with more steeply declining impatience are more likely to be debtors. The sign effect relates negatively to borrowing. Survey responses indicative of high or declining impatience are associated with credit card borrowing and other overborrowing indicators.     

The Political,Economic, and Social Aspects of Katrina

In this paper, we examine the resiliency of community recovery after a natural disaster. We argue that a resilient recovery requires robust economic/financial institutions, political/legal institutions, and social/cultural institutions. We explore how politically and privately created disaster preconditions and responses have contributed to or undermined institutional robustness in the context of the Gulf Coast's recovery after Hurricane Katrina. We find that where postdisaster resiliency has been observed, private-sector responses contributing to the health of these institutional arenas are largely responsible. Where postdisaster fragility and slowness has been observed, public-sector responses contributing to the frailty of these institutional arenas are largely the cause. In other words, we engage in a comparative institutional analysis of civil society, entrepreneurial commercial society, and government agencies and political actors in the wake of a natural disaster.     

The meaning of “social capital” as it relates to the market process

There is an unhelpful vagueness in the meaning of social capital. While this article does not provide a definitive interpretation of this important concept, after examining a representative sample of various usages—including the contributions of Becker, Coleman, Jacobs, and Putnam—it offers an interpretation of social capital, emphasizing the emergent character of norms and networks in public space, which is germane to the understanding of the entrepreneurially driven market process.     

Fiscal policy,wealth divergence,and lifetime utility

Using a two-country dynamic optimization model where the less patient country decumulates and the more patient one accumulates wealth, we analyze spillover effects of lump-sum and consumption taxes. A lump-sum tax on a country definitely harms the other country through a change in the rate of interest. A lump-sum tax on either country always improves the less patient country's asset position. A consumption tax has no spillover effect, although it is Pareto-inferior. Applying these results into a closed-country context with heterogeneous agents, we also discuss policy implications of a discriminatory tax.     

LUXURY AND WEALTH*

I develop a dynamic theory of luxury consumption, particularly emphasizing the causal effect that pursuit of luxury goods has on wealth accumulation. A quasi‐luxury is defined as a good whose marginal rate of substitution is increasing in a utility index. Under certain conditions, it is indeed a luxury good. When current wealth holding falls short of (exceeds) long‐run needs, luxury consumption is postponed more (less) easily than necessity consumption, due to a lower (higher) time preference for luxury and/or a higher intertemporal elasticity of substitution thereof. Preferences for quasi‐luxuries lead to a higher steady‐state value of wealth or capital.

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Equilibrium preference free pricing of derivatives under the generalized beta distributions

This paper demonstrates that the risk neutral valuation relationship (RNVR) exists when the aggregate wealth and the underlying variable for derivatives follow a distribution from the family of transformed beta distributions. Specifically, the asset specific pricing kernel (ASPK) is solved for the generalized beta (GB) distribution class, which is extremely flexible to describe various shapes of underlying distributions. With the ASPK in hand, preference free call option formulas are obtained for rescaled and shifted beta distribution of the first kind (RSB1) and for the second kind (RSB2). These distributions include many well known important distributions as special cases. If the preference free formula does not exist under the GB distribution class, then the call price is shown to be numerically calculated without information of preference parameters once the spot price of the underlying is given.     

Development of educational program for production manager leading new perspectives on manufacturing technology

In this paper, we consider the problems associated with the development and management of an educational program for manufacturing managers in leadership roles who are making contributions towards the creation of customer delight as well as customer satisfaction using manufacturing technology. The basic concept combines an intelligent knowledge-based approach with the kaizen activity program within the framework of value creation and comparative advantage models based on a network referred to as Academia, Business, Consultancy, and Government (ABC-G). This educational program, which reflects the characteristics of manufacturing technologies and practices in the Hokuriku District of Japan, was developed in 2005–2006 and the trial education was developed in 2005 and 2006, and a trial run of this program was conducted in 2006 and 2007 in close collaboration with local manufacturing companies and their employees. The results are informative of the effects of educating manufacturing managers in Japan and the problems that will have to be overcome for the continuous improvement of the program.