Remedying Illegal Actions of Judgment Proof Injurers Via Contracts,Fines and Sanctions

This paper studies the impact of the judgment proof problem on the design of incentives to prevent illegal behavior when the principal delegates a risky production activity to the agent in the presence of moral hazard and adverse selection. The agent can reduce costs by engaging in an illegal action that generates liability. When insolvency is endogenously determined, the principal neither provides incentives to the agent to induce a fully legal action nor designs a contract that makes either party insolvent. The social optimum can be achieved by a fine or non‐monetary sanction. If the fine cannot correct inefficiency, non‐monetary sanction achieves the social optimum by the fully legal action. Copyright © 2013 John Wiley & Sons, Ltd.     

Convenience yield and the theory of storage: applying an option‐based approach

We propose that an options‐based approach is a superior alternative to the traditional cost‐of‐carry method to model both the behaviour of convenience yields and the commodity price responses to changes in inventory levels. This approach is shown to be more robust and avoids the simplifying assumptions embedded in cost‐of‐carry valuation which fully accounts for the non‐negativity constraint on inventory. Unlike the cost‐of‐carry approach, the options‐based approach does not treat the convenience yield as an exogenous factor. This offers a more natural measure of implied convenience yields in commodity trading strategies. We test the relationship between convenience yields and inventory levels for a number of liquidly traded base metals using both methods. Our results show that the relationship between convenience yields and inventory levels is strongly defined under the options‐based approach in line with market beliefs. This result is consistent with other studies that have used the options‐based approach in other nonmetals commodity markets.     

Using DEA to evaluate the state of society as measured by multiple social indicators

This paper presents an approach for discussing the state of society, which is measured by multiple social indicators, using data envelopment analysis (DEA). Replacing inputs and outputs in DEA with negative and positive social indicators respectively, we analyze the desirability of living in the 47 prefectures of Japan. This is also a proposal for the potential use of DEA in multi-dimensional evaluation analysis other than the standard DEA efficiency analysis. The results using eight social indicators identify 26 DEA desirable prefectures out of the 47 and present other useful knowledge and information. It is concluded that DEA, which can avoid uniform evaluation by an a priori weighting system, provides availability as a comprehensive evaluation tool different from traditional ones.     

Measuring DEA efficiency in cable television network facilities: what are appropriate criteria for determining the amounts of governmental subsidies?

Recent technological developments have transformed the cable television industry (CATV) from a simple re-transmitter of terrestrial broadcasting to a provider of a broader-band information infrastructure. With cable operators facing an undesirable market situation while operating a fiber optics network vital to the creation of an information-based society within Japan, the Japanese Government has introduced several supportive measures for the industry. Such governmental intervention should desirably be justified not only from a political viewpoint but also from an economic one; otherwise such measures may distort economic efficiency. In this article, using Data Envelopment Analysis (DEA), the authors identify the deficiencies of an accounting-based intervention scheme and propose an alternative framework with no disincentive side effects.     

A new approach to estimate concentrations of alcohol ethoxylate in rivers in Japan for screening-level risk assessment

Alcohol ethoxylate (AE) is a widely used household detergent that is ubiquitous in aquatic environments. To assess and manage the risk of AE, its environmental exposure concentrations must be evaluated in rivers nationwide; however, very few AE monitoring data are currently available. Furthermore, developing a rigorous exposure model that would cover rivers nationwide would require a great deal of time, human resources, and money. We developed a new approach to estimate AE concentrations in rivers throughout Japan for screening-level risk assessment. In this approach, five-day biochemical oxygen demand (BOD₅) data were used as a surrogate indicator of the AE concentration in river water. The Tama and Nikko Rivers were ranked according to their BOD₅ data, and the AE concentrations of the Nikko River were then estimated using the Standardized Hydrology-based Assessment tool for chemical Exposure Load (AIST-SHANEL) model. For each river, the concentrations of AE in its waters were projected based on that river’s reported BOD₅ values, its ranking, the approximation formula for AE and BOD₅, and estimated AE concentrations in water of the Nikko River from the model. The accuracy of the projected values was validated by comparing the projected AE concentrations in water from the Tama River with its monitoring data. There are various technical uncertainties associated with this approach; however, our results suggest that this new approach can be applied in screening-level exposure assessment of other chemical substances that have properties similar to AE.     

Why Can’t I keep my Surname? The Fairness and Welfare of the Japanese Legal System

This study examines the welfare and fairness implications of Japan’s current policy on marriage surnames versus the proposed revised family law, which would enable husbands and wives to retain their premarital surnames. The study compares welfare in these two legal states, with a married couple’s welfare dependent on marriage-surname choice. It reviews the external preferences of anti-revisionists by the fairness criteria of impersonality or extended sympathy. Utilizing web-based survey data, the study conducts nonparametric rank analysis and parametric analysis of willingness to pay (WTP) for surname retention and legal support. Moreover, it conducts a structural equation analysis via a multiple indicators multiple causes (MIMIC) model, incorporating surname attachment and fairness as latent variables. The study shows that the revised law can increase welfare and that external disutility of the legal revision is invalid on fairness grounds.     

Dynamics of agglomeration,accessibility, and total factor productivity: evidence from Japanese regions

With Japan’s declining population, improving productivity is important to achieving continuous regional economic growth. This study focuses on the regional effects of population agglomeration and accessibility on total factor productivity (TFP). Empirical analysis shows that population agglomeration contributed to TFP growth, most significantly in the Greater Tokyo area. The interaction (flow) of people was examined and the importance of high-speed transportation network for TFP growth was clarified as the effect of accessibility on TFP growth. Population agglomeration and the development of transportation network are thus important strategies for growing regional economies.     

Relationship between environmental performance and financial performance: an empirical analysis of japanese corporations

The hypotheses that a firm's environmental performance has a positive impact on its financial performance and vice versa are statistically supported by Japanese data. However, this tendency for two‐way positive interaction appears to be only a relatively recent phenomenon. The tendency for realizing the two‐way interaction is not limited to the top‐scoring firms in terms of both financial and environmental performance. On the contrary, this is also a trend that can be observed fairly generally. Obviously, when we consider only scores of those companies that published the relevant information in their environmental reports, and conduct the statistical causality test with such information as additional input to the pooled time‐series and cross‐section data of financial performance, the results become more strongly significant. From the recent experience of environmental policies in Japan, we infer that information‐based environmental policy measures are effective to encourage the ongoing transition toward a more sustainable market economy. Copyright © 2006 John Wiley & Sons, Ltd and ERP Environment.     

The US tech pulse,stock prices,and exchange rate dynamics: Evidence from Asian developing countries

This paper empirically investigates the economic relationship between the US and Asian economies after the Asian currency crisis in Indonesia, Korea, the Philippines, Singapore, and Thailand, employing a cointegration methodology. Based on the empirical results, we conclude that the interdependence between the US and these Asian economies has intensified especially in information technology industries, and that their stock markets are integrated. On the other hand, the relationship between the domestic stock and foreign exchange markets is found to have a negative sign, interpreted by portfolio balance approach, in Indonesia, Korea, and Thailand. This result implies that the exchange rates of these countries are relatively vulnerable to fluctuation in international portfolio investments.     

Retaining telecommunication services when universal service is defined by functionality: Japanese consumers' willingness-to-pay

This study uses contingent valuation to measure Japanese customers' willingness-to-pay to maintain combinations of five telecommunication services that are considered substitutes if universal service is defined on the basis of functionality. The analysis revealed the following results. First, consumers are more willing to pay to retain voice communication services than data transmission services. Second, customers accept Internet Protocol telephony as a substitute for plain old telephone service (POTS) as a universal service, and they are willing to pay much more than Japan's current Universal Service Fund charge. Third, even when mobile phone service (MOB) is available, consumers will pay to retain fixed-line voice services. Finally, consumers have an equal desire to keep fiber-to-the-home (FTTH) and fixed-line voice services, but it is less than the demand for MOB. Thus, under the present definition of POTS as a universal service, FTTH could be considered as a basic telecommunication service.