On the Applicability of the Tiebout Model to Japanese Cities

The purpose of this paper is to apply the so-called Tiebout hypothesis empirically to Japanese cities. 117 cities in the Tokyo metropolitan area and 72 cities in the Osaka metropolitan area are respectively classified into eight clusters using public expenditure densities as attribute variables. The land price of each city is then regressed on per capita income, population density and dummy variables corresponding to the clusters. High statistical significance of the estimated coefficients of the dummy variables can be taken meaningfulness of the initial classification of cities in which individuals of varying preference to the different patterns of public expenditures reside, Through this procedure, the authors reached the conclusion that the Tiebout hypothesis is applicable to cities in Japanese metropolitan areas.     

Task Assignmentand Agency Structures

This paper considers an agency model in which a principal delegates an agent authority to choose investment projects. The performance of the project depends stochastically on the agent's evaluation and operating efforts. The paper examines the conditions under which the principal prefers to assign production to a second agent. It is shown that the tasks will be assigned to two agents of the agent chooses an unobservable operating effort. The tasks will be assigned to one agent if the agent's evaluation and operating efforts are both unobservable and if disutilities of efforts are large relative to the profit from the risky project.     

On the Cost Structure of the Japanese Property-Casualty Insurance Industry

This article tests economies of scale and economies of scope for the property‐casualty insurance companies in Japan. We fit a composite cost function to a set of Japanese firms over the period from 1980 to 1995 and employ an error components model. Our main findings are as follows. First, statistically significant economies of scale are observed in both Japanese firms and foreign firms operating in Japan. Second, economies of scope are also statistically significant for Japanese firms and most of the foreign insurers between the “third sector” products and the rest of the property‐casualty insurance lines.