Japanese-airport benchmarking with the DEA and endogenous-weight TFP methods: testing the criticism of overinvestment in Japanese regional airports

As aviation demand increased constantly along with the rapid economic growth in Japan and surrounding East Asian countries over the last several decades, Japanese government promoted airport construction since 1950s. However, the recent change in the economic background has made rise to a criticism toward the inefficient public investment, especially the transportation infrastructure. In this criticism, it has been argued that some of the small regional airports are indeed suffering the issue of overinvestment. Thus this paper attempts to verify the validity of such criticism by statistically measuring the efficiency of Japanese airports and conducting comparative analysis. For this objective, the paper employs two distinct methods namely data-envelopment analysis and endogenous-weight TFP methods. The results from these methods consistently indicates that the efficiency of regional airports in mainland Japan are lower than others, and that those airports constructed in the 1990s are relatively inefficient.     

Sharing health risk and income risk within households: evidence from Japanese data

The question of which household members should consume medical services, and in what quantities, is examined by using Japanese household-level data. Two key concepts are employed, health risk and income risk, and whether family heads or dependants bear these risks investigated. Health risk is the risk that a household member falls ill, while income risk is the risk that future household income decreases. It is found that both heads and dependants make fewer visits to doctors as household size increases. It is also found that only dependants visited doctors less frequently following the reform of the public health insurance system, which raised the co-payment rate of family heads from 10% to 20%. These findings imply that heads and dependants share health risk but dependants bear income risk.     

Destabilization effect of international trade in a perfect foresight dynamic general equilibrium model

In the present paper, we consider a two-country, two-good, two-factor general equilibrium model with CIES nonlinear preferences, asymmetric technologies across countries and decreasing returns to scale. It is shown that aggregate instability and endogenous fluctuations may occur due to international trade. In particular, we prove that the integration into a common market on which countries trade the produced good and the capital input may lead to period-two cycles even when the closed-economy equilibrium is saddle-point stable in both countries.     

New evidence for exchange rate pass-through: Disaggregated trade data from local ports

For the estimation of exchange rate pass-through (henceforth ERPT), except for some evidence based on firm-level data, even the most disaggregated level of national export data is still biased with aggregation over sub-regions within an exporting country. We investigate to what extent this aggregation within product category is biased by comparing ERPT estimates across local ports. We use monthly exports at the HS 9-digit level from January 1988 to December 2005 for five major Japanese ports. Using a panel data regression framework, we control for exporting industry and importing country. Statistical tests provide strong evidence that export prices are set at different levels across local ports and that they correspond differently with respect to fluctuations of exchange rates.     

Public capital and patterns of growth in the presence of threshold externalities

This paper studies the relation between public capital accumulation and long-run economic growth. We emphasize three phenomena that may be accompanied by the presence of public capital: increasing returns, rivalry, and threshold externalities. We formulate a simple growth model that captures these features of public capital in a tractable manner. Assuming that investment for public capital financed by income taxation, we show that the threshold externalities may generate multiple equilibria, so that the pattern of growth and the realization of a specific steady-growth equilibrium are quite sensitive to the rate of income tax as well as to expectations of agents.     

Consensus building in safety and security: a case study of Fukushima evacuees returning home

This study examines consensus building in environmental and energy policies by analyzing the minutes of the safety and security committee of the Nuclear Regulation Authority (NRA) of the Japanese government, in the context of the discussion of the safe return of Fukushima evacuees after the 2011 Great East Japan Earthquake and Tsunami and the subsequent Fukushima nuclear disaster. One important issue associated with evacuation policies was the high number of evacuees, if not all, who were not willing to return to their old homes. Although the contents of governmental committee meetings are freely accessible through the internet, they have been rarely analyzed for these purposes. In this study, we used text-mining techniques to analyze NRA committee minutes quantitatively and qualitatively. We have three primary findings. First, the committee attempted to take evacuees’ feelings into account and pragmatically discuss what was needed to restore their lives and livelihoods, as well as to make its meetings transparent and open to the public by, for example, streaming them live on the internet. Second, in earlier committee meetings, government representatives insisted on specific policies made by themselves to control the return of evacuees. However, outside experts at the meetings convinced representatives that decisions regarding issues surrounding the safe return of evacuees should consider the opinions of the evacuees themselves. Third, the NRA reported the outcome of the meetings at a Cabinet meeting to accelerate policies requiring urgent implementation as well as those related to the alleviation of people’s anxieties regarding exposure to radioactivity or those related to equal treatment among those who wanted to voluntarily move away from the affected areas versus those who want to return to their homes. Finally, this analysis further identified a number of issues concerning citizen participation and governance associated with environment and energy policies, all of which need to be overcome in order to establish consensus among concerned stakeholders.     

Modelling intensities of order flows in a limit order book

We propose a parametric model for the simulation of limit order books. We assume that limit orders, market orders and cancellations are submitted according to point processes with state-dependent intensities. We propose new functional forms for these intensities, as well as new models for the placement of limit orders and cancellations. For cancellations, we introduce the concept of ‘priority index’ to describe the selection of orders to be cancelled in the order book. Parameters of the model are estimated using likelihood maximization. We illustrate the performance of the model by providing extensive simulation results, with a comparison to empirical data and a standard Poisson reference.