Measuring Regional Wealth and Assessing Sustainable Development: An Application to a Disaster-Torn Region in Japan
- 415 Downloads
We construct a regional comprehensive wealth as an indicator of sustainability in Miyagi Prefecture, Japan. Of particular interest is the change in wealth before and after a natural disaster, since the index could serve as a benchmark of investment into post-disaster reconstruction. We first discuss an optimum spatial unit of wealth accounting and sustainability analysis. The resultant regional wealth index had already been slightly declining during the 2000s due to stagnant investment into capital assets, oil capital loss, and budget deficit burden, until a natural disaster made the region significantly unsustainable. This wealth trend also differs from what emerges from the figures in Inclusive Wealth Report 2012. Including population decrease makes the wealth per capita look better, whose interpretation warrants caution due to the neglected forward-looking demographic change in a developed nation.
KeywordsInclusive wealth Sustainable development Genuine savings Disaster reconstruction Population change
JEL ClassificationE01 J1 O1
The authors appreciate beneficial comments from (many) anonymous referees, Federico Castillo, Masaaki Kuboniwa, Shunsuke Managi, Anil Markandya, Alistair Munro, Ayumi Onuma, Itsuo Sakuma, Michinori Uwasu, participants of workshops/sessions at Kyoto, Senshu, SEEPS 2013 (Kobe, Japan), EAAERE 2014 (Busan, South Korea), 17th International Economic Association World Congress (Dead Sea, Jordan), and the 5th World Congress of Environmental and Resource Economists (Istanbul, Turkey). Grant-in-Aid for Specially Promoted Research (26000001) by Japan Society for the Promotion of Science (JSPS), as well as Social Scientific Survey of Great East Japan Earthquake by JSPS, are also acknowledged.
- Aronsson, T., & Löfgren, K.-G. (Eds.). (2010). Handbook of environmental accounting. Cheltenham: Edward Elgar.Google Scholar
- Atkinson, G., & Hamilton, K. (2002). International trade and the ‘ecological balance of payments’. Resources Policy, 28(1), 27–37.Google Scholar
- Barbier, E. B. (2009). Ecosystems as natural assets. Breda: Now Publishers Inc.Google Scholar
- Barro, R. & Lee, J. (2011). Barro-Lee educational attainment dataset. www.barrolee.com. Accessed January 5, 2013.
- Bolt, K., Matete, M., & Clemens, M. (2002). Manual for calculating adjusted net savings. World Bank: Environment Department.Google Scholar
- BP. (2012). Statistical review of world energy. June 2012. http://www.bp.com/statisticalreview. Accessed 23 Sep 2015.
- Dasgupta, P. S., & Heal, G. M. (1979). Economic theory and exhaustible resources. New York: Cambridge University Press.Google Scholar
- Development Bank of Japan. (2011). Higashi nihon daishinsai shihon stock higai kingaku suikei (in Japanese).Google Scholar
- FAO (2010). Global forest resources assessment 2010: Country report Japan. Rome: Food and Agriculture Organization of the United Nations.Google Scholar
- Ferreira, S., & Hamilton, K. (2010). Comprehensive wealth, intangible capital, and development. World Bank policy research Working Paper no. 5452, Washington, DC: World Bank.Google Scholar
- Fukushima Prefecture. (2013). Annual report 2013. https://www.pref.fukushima.lg.jp/sec/37380a/. Accessed May 8, 2015 (in Japanese).
- Harada, Y. (2012). Shinsai fukko giman no kouzu. Tokyo: Shincho-sha (in Japanese).Google Scholar
- Hartwick, J. M. (1977). Intergenerational equity and the investing of rents from exhaustible resources. American Economic Review, 67, 972–974.Google Scholar
- Hayashi, N., & Saito, S. (2011). Iwate-ken, Miyagi-ken, Fukushima-ken no shourai suikei jinko. SERC Discussion Paper 11023, Tokyo: CRIEPI (in Japanese).Google Scholar
- Hoshi, T., & Ito, T. (2012). Defying gravity: How long will Japanese government bond prices remain high? NBER Working Paper 18287.Google Scholar
- Kainou, K. (2013). Energy consumption statistics by prefecture. http://www.rieti.go.jp/users/kainou-kazunari/energy/index.html. Accessed January 5, 2014.
- Lampietti, J. & Dixon, J. A. (1995). To see the forest for the trees: A guide to non-timber forest benefits. Washington, DC: Environment Department Environmental Economics Paper No. 13.Google Scholar
- Mincer, J. (1974). Schooling, experience and earnings. New York: Columbia University Press.Google Scholar
- Ministry of Internal Affairs and Communications. (2008). Studies on information technology and regional productivity. Tokyo: MIAC. (in Japanese).Google Scholar
- Mitsuhashi, H. (2010). Chiiki innovation no dairi shihyo to shiteno TFP ni kansuru kenkyu. Discussion Paper no. 65, Tokyo: MEXT (in Japanese).Google Scholar
- Mumford, K. (2012). Measuring inclusive wealth at the state level in the United States, in UNU-IHDP and UNEP, Inclusive wealth report 2012: Measuring progress toward sustainability, Cambridge: Cambridge university press.Google Scholar
- Murota, Y. (2008). Estimates of 47 prefectural CO 2 emissions. http://www.env.go.jp/earth/ondanka/sakutei_manual/kaitei_comm/com02/ext01.pdf. Accessed January 1, 2013 (in Japanese).
- Nordhaus, W., & Boyer, J. (2000). Warming the world. Cambridge: The MIT Press.Google Scholar
- Sen, A. (1982). Choice, welfare and measurement. Cambridge: Harvard University Press.Google Scholar
- Tallis, H., Wolny, S., Lozano, J. S., Benitez, S., Saenz, S., & Ramos, A. (2012). “Servicesheds” enable mitigation of development impacts on ecosystem services. New York: Mimeo.Google Scholar
- UNU-IHDP & UNEP. (2012). Inclusive wealth report 2012. New York: Cambridge University Press.Google Scholar
- UNU-IHDP & UNEP. (2014). Inclusive wealth report 2014. New York: Cambridge University Press.Google Scholar
- World Bank. (2006). Where is the wealth of nations?. Washington, DC: World Bank.Google Scholar
- World Bank. (2011). The changing wealth of nations: Measuring sustainable development in the new millennium. Washington, DC: World Bank.Google Scholar