Causative Factors for Improvement in Regional Satisfaction Level: Evidence from Structural Equation Model with Town-Based Data in Yamaguchi, Japan

  • Yoji KunimitsuEmail author


The question of how to improve the satisfaction of residents is becoming important to ease regional income inequalities and achieve a more balanced society in Japan. This study empirically shows the causative factors of residents’ satisfaction in their daily life from the regional as well as personal points of view. The ordered probit model was employed to reveal regional differences in average regional satisfaction level and controlling personal influences. Regional differences were then explained by the regional factors in the structural equation model considering covariance between explanatory variables. Estimations demonstrated that, first, the satisfaction level in each region differs significantly from other regions, suggesting that there are regional factors that are difficult for individual residents to change. Second, such regional factors can be explained by the economic revitalization level which is represented by job opportunities and average gross regional production, social capital, which is shown by the level of trust, altruistic norms and human networks, public facilities relating to basic human needs and environmental functions, and reputation outside the town. Especially, external reputation had the strongest impact. Third, social capital was degraded in a town where the revitalization level was high, showing a trade-off effect. However, the construction of public facilities advances in towns where the revitalization level is high. These trade-off and supplemental effects can be explained by a latent factor like urbanization. Therefore, regional policy making should take these factors and mutual relations into consideration.

Key words

Structural equation model Ordered probit model Social capital Revitalization of town External Reputation Public facilities 

JEL Classification

O15 R11 R15 R53 R58 


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An earlier version of this paper was presented at the JEPA international conference in 2012. This study was supported by JSPS KAKENHI Grant Numbers 24330073, 25450339 and 21248028. The author appreciates their comments and support.


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Copyright information

© Japan Economic Policy Association (JEPA) 2013

Authors and Affiliations

  1. 1.National Agriculture and Food Research OrganizationTsukuba, IbarakiJapan

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