Japanese Economic Review最新文献

Finding a data set that supports a theory is not enough for the theory to gain credibility. Credibility of a theory is established only after the initial supporting finding can be replicated by a number of follow-up studies. Economics so far has paid little attention to replicability, presumably because the profession has been overly pessimistic about obtaining a high degree of replicability of non-trivial theoretical predictions. By using a large data set I have collected that involves more than 4,000 subjects, I show that there is hope for economic theory to gain credibility by means of replications of laboratory data.

We investigate revenue maximisation in general allocation problems with incomplete information, where we assume quasi-linearity, private values, independent type distributions and single-dimensionality of type spaces. We require a mechanism to be deterministic, strategy-proof and ex-post individually rational. We assume that each player has a type-independent preference ordering over deterministic allocations. We show that the Myerson's technique to solve the incentive-constrained revenue maximisation problem in single-unit auctions can be applied to general allocation problems, where the incentive-constrained revenue maximisation problem can be reduced to the simple maximisation problem of the sum of players’ virtual valuations without imposing any incentive constraint.

In this study, we construct an interregional trade model that includes endogenous fertility rates. The presented model shows that the agglomeration of manufacturing firms in a large region causes fertility rates to become lower than in a small region. We also find that a decrease in transportation costs results in the agglomeration of manufacturing firms, which lowers fertility rates in both large and small regions. In addition, comparing the competitive equilibrium with the optimal equilibrium, the fertility rates may be inefficiently small.

In this paper, we explore how land pricing reflects public perceptions of earthquake risk using officially appraised prices of land situated along the Uemachi fault, which lies on a north–south axis in the east of Japan's Osaka Prefecture. We reveal that land pricing along this fault has only incorporated fault-driven earthquake risk since residents and policy-makers first realized its potential following damage to the southern part of Hyogo Prefecture in a January 1995 earthquake along the Rokko–Awaji fault (an event now known as the Hanshin–Awaji earthquake). We find evidence of a discount of 20% in nonresidential land prices for every kilometre closer to the Uemachi fault line since the Hanshin–Awaji earthquake.

This paper proposes a new test for the null hypothesis of panel unit roots for micropanels with short time dimensions (T) and large cross-sections (N). There are several distinctive features of this test. First, the test is based on a panel AR(1) model allowing for cross-sectional dependency, which is introduced by a factor structure of the initial condition. Second, the test employs the panel AR(1) model with AR(1) coefficients that are heterogeneous for finite N. Third, the test can be used both for the alternative hypothesis of stationarity and for that of explosive roots. Fourth, the test does not use the AR(1) coefficient estimator. The effectiveness of the test rests on the fact that the initial condition has permanent effects on the trajectory of a time series in the presence of a unit root. To measure the effects of the initial condition, the present paper employs cross-sectional regressions using the first time-series observations as a regressor and the last as a dependent variable. If there is a unit root in every individual time series, the coefficient of the regressor is equal to one. The t-ratios for the coefficient are this paper's test statistics and have a standard normal distribution in the limit. The t-ratios are based on the OLS estimator and the instrumental variables estimator that uses reshuffled regressors as instruments. The test proposed in this paper makes it possible to test for a unit root even at T = 2 as long as N is large. Simulation results show that test statistics have reasonable empirical size and power. The test is applied to college graduates' monthly real wage in South Korea. The number of time-series observations for this data is only two. The null hypothesis of a unit root is rejected against the alternative of stationarity.

The reform of Japan's child benefit system in 2010 was followed by the abolition of the tax allowance for dependents in 2011. The present study uses micro-level data from the Employment Status Survey and an estimation of a discrete-choice model of labour supply to examine the effects of these reforms on the labour supply, after-tax incomes and the utility of households. The results show that the reforms decreased the labour supply of parents and that the funds necessary to implement them were underestimated by 22% when this behavioural change was disregarded.

Over the past few decades, much progress has been made in semiparametric modelling and estimation methods for econometric analysis. This paper is concerned with inference (i.e. confidence intervals and hypothesis testing) in semiparametric models. In contrast to the conventional approach based on t-ratios, we advocate likelihood-based inference. In particular, we study two widely applied semiparametric problems, weighted average derivatives and treatment effects, and propose semiparametric empirical likelihood and jackknife empirical likelihood methods. We derive the limiting behaviour of these empirical likelihood statistics and investigate their finite sample performance through Monte Carlo simulation. Furthermore, we extend the (delete-1) jackknife empirical likelihood toward the delete-d version with growing d and establish general asymptotic theory. This extension is crucial to deal with non-smooth objects, such as quantiles and quantile average derivatives or treatment effects, due to the well-known inconsistency phenomena of the jackknife under non-smoothness.

This paper presents a framework in which middlemen emerge to intermediate between ex-ante homogeneous buyers and sellers in the presence of search frictions. Middlemen announce prices, and hold an inventory to provide more sure services. Middlemen can mitigate trade imbalances with price competition. Using this framework I illustrate how the frictionless limit can emerge and how middlemen can implement the short-side principle for the market price to be Walrasian. The recent progress in the literature on intermediation will also be discussed.

This study reviews estimation methods for the infinite horizon discrete choice dynamic programming models and conducts Monte Carlo experiments. We consider: the maximum likelihood estimator (MLE), the two-step conditional choice probabilities estimator, sequential estimators based on policy iterations mapping under finite dependence, and sequential estimators based on value iteration mappings. Our simulation result shows that the estimation performance of the sequential estimators based on policy iterations and value iteration mappings is largely comparable to the MLE, while they achieve substantial computation gains over the MLE by a factor of 100 for a model with a moderately large state space.