An Econometric Analysis of Roadside Stations in Japan thatwere given New Type Grants
Ryusaku Matsuo
Mitoshi Yamaguchi
September, 2020
Discussion Paper No.2016

GRADUATE SCHOOL OF ECONOMICS
KOBE UNIVERSITYROKKO, KOBE, JAPANAn Econometric Analysis of Roadside Stations in Japan thatwere given New Type Grants*
Ryusaku Matsuo†and Mitoshi Yamaguchi‡

1. Introduction
Roadside Stations were first constructed in Japan by the erstwhile Ministry of Construction(now known as the Ministry of Land, Infrastructure, Transport and Tourism) in 1993, when a totalof 103 stations were set up. In 1999, this number had increased to 551, and by 2013, it had reached1014. As of 2020, there are 1173 Roadside Stations. A Roadside Station system is a registration
system for facilities with three roles: rest, offering information, and regional alliance functions.
The activities of Roadside Stations lead to endogenous development. Therefore, we sought tomeasure their contribution to the economy. We used several simultaneous equation models, which
include variables such as parking space, sales figures, management expense, number of visitors,
number of events, and gross business expense. In previous papers, we calculated the ripple effectof the Roadside Station on the economy. Here, we demonstrate that the number of employees is
estimated to have increased by 250 and 266 in the regions of Hanshin and Tajima, respectively.
Moreover, according to our research, the effective multiplication factor in the Hanshin region in
Hyogo Prefecture was 1.55.
The annual sales of all Roadside Stations in Japan were estimated to be approximately 250
billion yen in 2015. If the research result in the Hanshin region is applied to this annual total
amount, the economic ripple effect of Roadside Stations for all regions in Japan is estimated toreach 375 billion yen. In 2007 and 2010, two grants were provided to selected Roadside Stations.
One was the 2007 Nou-san-gyoson Kasseika Project Shien Kofukin (Grants to Support Projects
to Revitalize Rural Areas, GSPRRA), and the other was the Shakaisihon Seibi Sogo Kofukin(Comprehensive Grant for Infrastructure Development, CGID) in 2010. Of the 83 stations in thisstudy, 27 received the new type of grant. The stations that received these grants saw a significant
improvement in their business. Therefore, it is important to measure the factors that impact thesales of Roadside Stations in Japan.
* This paper is an extension of our previous work, originally published in Japanese (Matsuo, R. and M.

Yamaguchi (2016)). We have obtained permission from The Keizai-Keiei Gakkai at Kobe University to publish
the extended paper in English. We would like to thank Editage (www.editage.com) for English language
editing.
† Research Fellow, Graduate School of Economics, Kobe University
Visiting Research Fellow, Institute of Social Sciences, Toyo University
E-mail: yousakum@gmail.com‡ Emeritus Professor, Kobe University
E-mail: mitoshiyy@yahoo.co.jp
12. Endogenous development and Roadside Stations(1) Tourism Nation Promotion Basic Law
According to the Tourism Nation Promotion Basic Law of 2006 and the Tourism Nation
Declaration of 2003, tourism is defined as that which “… contributes to the development of therevitalization of the regional economy and an increase in employment management in all areas.
This also contributes to the stabilization of national life through the promotion of health andcreation of a charm-rich living environment”. Furthermore, the basic idea is to revitalize theregional economy through “… the sustainable development of the community, which enhances
the [sic] vitality. The local inhabitants can have a pride and attachment while respecting theindependent action that makes use of the inventive idea in the region”. With this law, thegovernment positioned tourism as a policy focus for the first time in the 21st century.
The law set forth the basic policy of revitalizing the regional economy through tourism. The
idea that it should be measured in order to improve the living conditions for residents under local
leadership is central to this policy. This basic policy required that activation be conducted by theregional main constituent, which was further clarified in the “Action Program for Realizing a
Tourism Nation” of 2013. In this program, three basic policies are mentioned: (1) creation of new
tourism, (2) promotion of sightseeing interlinked with infrastructure projects, and (3)maximization of the tourism potential in the region.
These city planning measures that aim to attract sightseeing are implemented based on theview of “endogenous development,” for which the city serves as a main constituent and seeks todevelop regional economies. According to Miyamoto (2007), endogenous development is defined
as “… the community development that improves the inhabitants’ welfare by the local
government. A group and individuals such as local companies, labor unions, cooperatives, NPOs,
and inhabitants issues making a plan by voluntary learning, and being made from voluntary
technology development, and using resources reasonably. In addition, it keeps the local
environments in good condition, and doing the economic development that came from theculture”. That is, this can be considered an idea for regional improvement, which enhances theappeal of the region and promotes city planning while the residents of the area tackle thedevelopment of regional economies positively.
The regional policy grounded in the Tourism Nation Declaration is based on the idea of suchendogenous development. To be precise, the action program calls for Roadside Stations (“Michino-Eki” in Japanese) all over the country to serve as centers for information dissemination for
tourists, and the action program will tackle the enhancement of this function. By stipulating thesecenters to promote the tourism policy, the planning of the regional revitalization policy forsightseeing is expected to be much more efficient. The policy that should be followed, especiallyin relation to tourism, is the newly introduced subsidy system. Following the basic policy ofendogenous development after the Tourism Nation Declaration, this system will issue the subsidy
alongside the business plan that a municipal corporation formulates, and the actual plan will be
implemented by the respective region. By combining the factors that strengthen the autonomy of
an area with the subsidy system for conventional community development, a new system has beendeveloped for the country, with prefectures maintaining autonomy.
2(2) Endogenous development theory and endogenous development policy
In this section, the endogenous development perspective is summarized first, followed by an
examination of the circumstances in which the administration implemented the endogenousdevelopment policy. Although endogenous development theory was intended to be submitted at
the UN General Assembly’ s Special Session on economics in 1975 as a method of encouraging
developing countries to actively participate in the international economy1), it came to be applied
thereafter in advanced nations for regional economic development, such as in Japan and inEuropean countries. As mentioned previously, the area serves as a subject, and endogenousdevelopment theory is based on the view that the residents themselves participate in thedevelopmental process and engage in regional improvement.
In contrast, Miyamoto (2007) emphasized that the community development which has been
undertaken in the developing countries was a from-abroad type of development that depended on
public works using capital from outside the region, and that the technique did not lead tosustainable development of the area. Moreover, Okada (2005) pointed out that the regional
improvement policy of major public works did not lead to continuous economic development in
the area on a large scale, and the profit and production ripple effects would ultimately return to thehead office in the Tokyo region. Furthermore, he noted that due to the shift of production bases
overseas in line with economic globalization, the companies that were invited to the region left
the region, which led to further depopulation of the region. He highlights the limitations of suchexogenous development.
It can be said that endogenous development is an effort led by the region, which was born outof a review of regional development policies led by the central government, however, many
researchers do not deny the importance of assistance from the central government. First,
Miyamoto (2007) stated that “… endogenous development does not refuse a foreign capital [sic]or technology at all …” and accepts the importance of a governmental bail-out package in an
activation policy. Hobo (1996) also expresses the view that the administration’s support is requiredas “… the combination of the new farming-and-mountainous-villages regional policy by a stateis especially indispensable to the promotion policy of an intermediate and mountainous area”.
Mizuno (1999) and Yamashita, Hoshino, and Kuki (2010) have conducted case studies of
disadvantaged areas where endogenous development has had support from the administration.
The former analyzes the endogenous development policy with governmental support in the caseof Shimokawa-cho, Hokkaido. The latter carry out the same analysis on Sugiyama colony,
Maizuru-city, Kyoto, with a particular focus on the interaction between the government and thecommunity in the disadvantaged area, and the desirable level of local involvement with thegovernment.
The legislation that provided for the local initiative approach and enabled the adoption ofregional improvement by sightseeing is the “Tourism Nation Promotion Basic Law”. In contrast,
the “Tourism Basic Acts”, enacted in 1963, which laid the foundation for the previous tourism
1)This part is incorporated by reference to “What should we do?”, a report of the General Assembly Special
Session on International Economic Cooperation by the Dag Hammarskjöld Foundation (Tsurumi and Kawata(1989)).
3policy, emphasized the from-abroad type development of public works, led by the central
government, such as in the maintenance of tourism infrastructure or a tourism relations institution.
It did not provide for local initiatives, which are an important part of endogenous development.
Therefore, after the Tourism Nation declaration, the basic thrust of the regional development
policy has shifted to local leadership, perhaps because the government itself has admitted theshortcomings of the come-from-abroad type development policy. To fully demonstrate the effectof the implementation of this policy on the target region, it is important that the human or structural
conditions in the area are optimal. Therefore, we examined various conditions in the target areas.
(3) Cooperation between the main constituents and network formation
Miyamoto (2007) pointed out that a bail-out package that accompanied an endogenousdevelopment policy would not be effective unless voluntary action was taken by an organization,
an individual, or a self-governing body (e.g., companies, labor unions, and cooperatives) in aregion. He also asserted that it was important to not limit industrial exploitation in a region to a
specific type of business, and to form industrial linkages from which additional value could flow
to support localized innovation at all stages. About this point, Okada (2005) also says that forminga circular flow of the economic system in a region by self-consciously building inter-industrial
relationships in an area leads to sustainable development of the regional economy.
Furthermore, Vazquez-Barquero (2002) argues that to improve the performance of a regional
economy in this endogenous development process, it is important that a local government should,
on its own initiative, involve various players in the area, such as organizations, public institutions,companies, cooperatives, and so on. Further, cooperation between the main constituents is vital toform a network in the region, and both are extremely important requirements to connect thesustainable development of the region to effective administrative support and aid from an
endogenous development policy.
The endogenous development policy by the administration is generally considered to havebegun with the “Special measures business for urban development”, submitted in 1984. In thisrespect, there was criticism2) that this undertaking was planned in great detail for every field, suchas the park tree planting business that preserves the environment, the maintenance of streets infront of the station, or the maintenance of a sports tourist facility, and that old local governments’duties were relegated to merely receiving applications for the subsidy. Therefore, from theperspective of the original endogenous development, cooperation between the main constituentshas not been achieved by the current plan, and at present, the endogenous development policy has
not yet gone beyond a central government-led policy.
In contrast, the new subsidy system applied to Roadside Stations in Japan after the Tourism
2)

Refer to Miyamoto (2007). It is said that “Local Development Special Task business is that the local

governments, working in partnership with administrative agencies, move forward with planning and gaining
consensus on large-scale urban development projects. And they promote the projects conducted only by local
governments to boost the unique and fascinating local development tailored to the local circumstances.”
Therefore, these projects centered on physical aspects such as the development of facilities.
4Nation declaration is, as we will describe, a truly collective plan that the target area formulates; it
is a system where many players in the region can cooperate and implement a business plan, sothat it is an actual regional improvement policy that is based on the idea of endogenousdevelopment. Therefore, the regional improvement policy based on endogenous development
theory in Japan is the first policy to emerge from the original idea of the Tourism Nation.
However, although the independence of an area is emphasized by the perspective thatcooperation between the main constituents in the region is important for endogenous development,
this does not preclude interchanges with other areas. Miyamoto (2007) argues that, in the current
globalization and the times of an information-oriented society, no region can be independent withrespect to the metropolitan area, and that it is important for the region to connect with themetropolis. Further, Yamamoto (2010) asserted that the regional economy was not closed, butrather that it opened towards the outside in pursuit of endogenous development. In other words, it
is essential for the region to utilize external resources (e.g., markets) and to send information tooutside areas; the region also forms an open network.
The way of thinking that developed the cooperation between the main constituents in regions
and the local outside is the “Interchange of cities and agricultural, mountainous and fishingvillages.” The Ministry of Agriculture, Forestry, and Fisheries is seeking to promote a “…
symbiosis and the convection of a city and an agricultural, mountainous and fishing village …”
aimed at realizing a new lifestyle where people travel between a city and an agricultural,
mountainous, and fishing village, back and forth in both directions, by mobilizing the travel of“… a person, a thing, and information”. This wide concept includes settlement, half settlement,
etc., in an agricultural, mountainous, or fishing village with green tourism. Miyazaki (2011)
examined the importance of interchanges between the city and farms in such a regional vitalization
project and found that it was important to build a policy or a system so that the interchange wastied to the direct promotion of the local agricultural, mountainous, or fishing villages in the future.
Thus, various views and studies regarding the city–farm village interchange reveal thatcooperation between the main constituents in regional improvement and network formation are
indispensable conditions for an endogenous development policy. The most important factor whentackling regional improvement activities to promote the network between the main constituentsin the region is the motivation to vitalize each subject, as mentioned below.
(4) Motivation of the Japan-type endogenous development policy and activation
At the beginning of the 1980s, regional policy based on endogenous development began inEuropean countries. According to Vazquez-Barquero (2002), the chief aim of the endogenousdevelopment policy of European countries is to promote local jobs through small and mediumsized enterprises in the region by providing an entrepreneur training program. That is, theendogenous development policy in European countries makes it a main purpose to accumulate
capital in an area. In contrast, Miyamoto (2007) argued that endogenous development in Japanwas understood in a frame of environmental conservation, and one of the main purposes of thatwas the improvement of welfare and culture of its regions, followed by the improvement in a local
resident’s settlement conditions.
5In this respect, Yamamoto (2010) also shows that the features of the Japan-type endogenousdevelopment place greater importance on socio-cultural change in a region than on economic
variables in the area. Furthermore, the author asserts that the endogenous development policy inJapan must be implemented according to the actual circumstances of each area that the main
constituent of each region can measure using the resources in the area and the human network.
Yamamoto finds that conserving nature and maintaining beautiful cityscapes, and a regional
policy based on human relationships and mutual trust are needed. At this point, Yamaguchi,
Kotani, and Tamura (2009) give the example of Onomichi-shi, Hiroshima, and observe thatmeasures to recover from low fertility in the region lead to the development of the area, and theyemphasize the importance of the soft project in a regional policy.
Thus, the endogenous development policy in Japan is characterized by the importance of soft
aspects such as the relationship between environmental preservation and human beings. In thisrespect, Shigemori (2003) states that, to clarify the purpose of the Japan-type endogenousdevelopment policy, it is instructive to draw a comparison with local sustainability in Europe. In
other words, the Japanese policy unifies the endogenous development policy and the sustainable
city policy of Europe, and by examining the idea of sustainable development used as a foundation
for a sustainable city policy, the direction of the Japan-type endogenous development policy
becomes clearer. The sustainable city policy mentioned above is a development policy in theEuropean Commission (1996) that aims at the preservation of the quality of life of future
generations through the preservation of ecosystems and social welfare.
Furthermore, research has found that this policy objective cannot be attained by technicalcompetition, knowledge, and technique alone, and that the motivation of each main constituent,
the flexibility of the organization, and a leader with a sense of responsibility toward and trust in
the region are necessary for it. “Agenda 21,” which was submitted at the United Nations
Conference (U. N. C.) and supported the draft of the sustainable city policy, clearly mentions3) thatthe motivation of each farmer and self-governing body is important for the success of sustainable
development of a rural area. Therefore, it is desirable for Japan-type endogenous development
policy to focus on soft infrastructure maintenance, such as childcare, education, welfare, medical
treatment, health, and environment management, and that the motivation of each subject isimportant to achieve its goal.
Thus, although the concept of local sustainability is very important in the Japan-type
endogenous development theory, Professor Toshiaki Kimura, who is the Cabinet Secretariat
regional revitalization advisor at Tokyo University of Agriculture, asserts4) that the upsurge ofhuman relations and motivation has had an effect on regional vitalization in the actual field.
Professor Kimura performs regional vitalization 200 times or more per year all over the country,
and has developed the theory that the key to vitalizing a region, which is a common concern for
all urban developers, is to increase the motivation of those who are engaged in city planning, andthat community development means human resources development. The administration is also
3)4)Please see “United Nations Conference on Environment & Development” (1992).
Please see Horikiri (2012).
6

taking note of the effect of motivation on such regional vitalization, and the tourism division, theJapan Tourism Agency (2012), has taken up a successful example of regional vitalization in the
Iwaki-shi, Fukushima Yumoto area, and the Tsukuba-shi, Ibaraki Miyamae area. This shows that
regional development encourages the rise of entrepreneurs in regions.
The development theories discussed above can be summarized based on three conditions: (1)for the Japan-type endogenous development policy to be effective, the support of theadministration is required, while regional improvement is locally led; (2) to harness support,cooperation between the main constituents and the formation of a network in the area are essential;(3) in the latter case, the opportunity for development and the motivation of the stakeholders in
the region are important factors. Therefore, this study aims to quantitatively clarify how thesubsidy system, a typical component of the endogenous development policy of Japan, can beutilized efficiently in collaboration with each main constituent of a region.
3. Endogenous development and a new type of grant for Roadside Stations
The basic concept of the Roadside Stations relies on endogenous development theory, andmost Roadside Stations offer local agricultural products at their outlets and in the local food menus
at their restaurants. In a study published in March 2018, Matsuo and Yamaguchi estimated theeffective multiplication factors for Roadside Stations in Hyogo Prefecture; the factor is defined as
the ratio of the total economic effects divided by the direct economic effects. According to theresearch, the effective multiplication factors in the Hanshin and Tajima regions in Hyogo
Prefecture are 1.55 and 1.49, respectively. These results show that the regional economic effectsof Roadside Stations are considerable, and even in rural areas such as Tajima, there are a few
nonagricultural industries (Matsuo and Yamaguchi (2018), (2019)).
We also estimate the employment effects of Roadside Stations in the same regions. The
number of employees is estimated to have increased by 250 and 266 in the regions of Hanshin
and Tajima, respectively. Further, according to our research, the effective multiplication factor in
the Hanshin region in Hyogo Prefecture is 1.55. The annual sales of all Roadside Stations in Japan
were estimated to be about 250 billion yen in 2015. If the research result in the Hanshin region is
extrapolated to this annual total, the economic ripple effect of all Roadside Stations for regions inJapan is estimated to reach 375 billion yen. As mentioned previously, the regional economic
circulations created by Roadside Stations follow the endogenous development theory andcontribute to the promotion of regional economies.
For this study, we used data from two questionnaire surveys. The first is “Questionnaire
Survey about the Disaster Protection Function of the Roadside Stations to the Station Masters,”
which was conducted by NPO Hito-to-Michi-Kenkyukai (Human and Road Research Group;
NPO Representative is Junko Matsumoto, and Matsuo is a fellow, RIETI at this NPO), in August
2012. We sent a survey form to 986 Roadside Stations and received responses from 727 of them
(73.7% response rate). The second is the “Questionnaire Survey of Station Masters about theEstablishment and Management of the Roadside Stations” which was conducted by this study’s
coauthor, Matsuo, in September 2013. Survey forms were delivered to 307 Roadside Stations in
the Kinki, Hokuriku, and Hokkaido regions, and responses from 94 of them were received. The
7

response rate was low because some question items are too confidential, such as the sales numbers
and number of visitors at the Roadside Stations. Therefore, we had an effective sample of 83
responses in this study because of some incomplete forms.
In this study, we conduct a factor analysis of the earnings of Roadside Stations using asimultaneous equation system. The Roadside Station was constructed by the erstwhile Ministryof Construction (now called the Ministry of Land) in 1993. The stations that received the new typegrants were: Aito Marguerite Station, Ayu no sato Yadagawa, Ise Honkaido Mitsue, Inagawa,Ibuki no sato, Ibusuki, Onneyu Onsen, Kasaoka Bay Farm, Kita Harima, Kutsuki Shin-Honjin,
Shiotsu-Honjin, Shiotsu-kaido Adikama no sato, Suzunari, Swan 44 Nemuro, Takigawa,Totsukawa-go, Harima Ichinomiya, Futakami Park Taima, Funaya no sato Ine, Fresh Asago, Miki,
Mizu no sato Sawara, Mizuho no sato Sarabiki, Minami Haga, Myoe Furusato-kan, Youka Tajima
no kura. Figures 1 and 2 show the difference in the percentage of each class in total sales. Bothfigures show how New Grants stations (NGS) are superior to the others. For example, the total
percentage of sales in the top 3 stations (0.4 ～, 0.3～ 0.4, and 0.2～ 0.3 billions) exceeds 50 in
NGS, but all other stations are only at 35%. Similarly, the total percentage of the top 3 stations interms of the number of visitors (850 thousand people –, 550 – 850 thousand people, 250 – 550
thousand people) is about 60% in NGS, but all other stations are only at 45% (Matsuo andYamaguchi (2016)).
A similar finding can be seen in Table 1. In all eight subjects (such as sales amount, number ofvisitors, etc.), the values of the NGS exceeded that of the non-NGS, except for the management
expense item (33 and 32). Not only benefits such as total sales but also cost aspects such as grossbusiness expense are larger in NGS. The sales amount/management expense is much higher in
NGS. Therefore, N Grant has excellent performance. Table 2 shows the difference among the top
10 groups for sales between the two groups (i.e., the stations that received the grant and those that
did not). For example, of the total of 83 stations, 27 were given the grant (32.5%). The table showsthat the management expense and gross business expense are almost the same between the twogroups (33.3 vs. 32.5). However, the parking space was smaller in the NGS. On the contrary, thenumber of events is much larger in the New Grant stations (NGS stations have about 60% andnon-NGS stations have 40%). In addition, the number of visitors and total sales are higher in the
NGS (40 vs. 32.5). Thus, the NGS have a much higher percentage (both 53.3 are much higher
than 32.5) in sales amount/management expense and total sales/gross business. This shows how
the number of events and the number of visitors are important to sales. Increasing the number ofvisitors involves considerable effort.
Here, we discuss the numerical values for station rank 1 and rank 20 for the sales amount withrespect to 5 variables (number of visitors, number of events, parking space, gross business expense,and management expense. See Appendix Table 1). In terms of sales, No. 1 is 688 million yen, andNo. 20 is 269 million yen. In terms of parking space, No.1 can accommodate 633 cars and No.20,
134 cars. For the number of visitors, No. 1 had 2.5 million people and No. 20 had 500,000 people.
In terms of the number of events, No.1 had 45 events and No. 20 had 9. No. 1 had a gross business
expense of 3,300 million yen and No. 20, 670 million yen. For management expenses, No. 1
incurred 150 million yen and No. 20, 46 million yen.
8

Figure 1 Sales in Roadside Stations
100%
90%
80%
70%

0.4 billion yen〜

60%

0.3〜0.4 billion yen

50%

0.2〜0.3 billion yen

40%

0.1〜0.2 billion yen

30%

0.05〜0.1 billion yen～0.05 billion yen

20%
10%
0%

New Grant(Average 0.217731 billion yen)

All Stations(Average 0.169352 billion yen)

Figure 2 Number of visitors in Roadside Stations
100%
90%
80%

850 thousand people～

70%

550 ～850 thousand people

60%

250 ～550 thousand people

50%

150 ～250 thousand people

40%

50 ～150 thousand people

30%～50 thousand people

20%
10%
0%

New Grant(Average : 498 tho usand people)

All Stations(Average : 35 7 thousan d people)

Table 1 Difference in business content between all stations and new grant station(1)
Sales amount（million yen）
All stations
160
New Grant stations
188(5)
Gross busines expense（million yen）
All stations
526
New Grant stations
557

(2)
(3)
Number of visitors
Number of events(thousand)(number)
366
6
479
11
(6)
(1) / (5)Management expense
Sales / Gross（million yen）
busines expense
33
0.506
32
0.555

9

(4)
Parking spaces(Number of cars)
117119(1) / (6)
Sales / Management
expense7.5
10.0

Table 2 Percentage of business content between new grant stations and non-new grant stations in
the top 15 position in sales amount

Sales amountParking spaces
Number of visitors
Number of events
Gross business expense
Management expense
Sales amount/ Manageent expense
Sales amount/ Gross business expense
New grant station/ All stations

New grant stations
(%)
40
26.7
40
60
33.3
33.3

Non-new grant stations
(%)
60
73.3
60
40
66.7
66.7

53.3

46.7

53.3

46.7

32.50%

Next, we show the ranking of each of the six variables (total sales, parking space, number ofvisitors, number of events, gross business expenses, and management expenses) for the top 10
sales amounts.
For A, No.1, events is 1st, management is 2nd, parking is 6th, and business is 8th. Therefore, A
has many events and offers a good service. The parking space is wide, gross business expense islarge, and the building is probably in very good condition. For B, No. 2, parking is 5th, and eventsis 11th, which indicates a fair number of events and a large parking space as well. For C, No. 3,
parking is 4th, and the visitors is 12th. Although other factors are not conspicuous, they remain 3rd.
For D, No. 4, events is 2nd, visitors is 15th, and it has three parking lots. For E, No. 5, events andvisitors are 9th. This station has three parking lots and hosts many events, and parking space iswide and can accommodate many visitors. For F, No. 6, gross business expense is 7th and parking
is 11th, that is, a good building and wide parking space to attract visitors. For G, No. 7, grossbusiness expense is 13th and parking is 18th, that is, a good building and wide parking space toattract visitors.
For H, No. 8, events is 7th, visitors is 12th, and gross business expense is 15th. For I, No. 9,
visitors is 6th, and gross business expense is 22rd. For I, No.10, management expense is 10th, andevents is 16th. Among the low 20 Roadside Stations, the stations of Hokkaido and the depopulated
and difficult-to-access areas in Kinki have 9 stations each. Some stations that show fairly good
positions in terms of parking, gross business, and management expenses still rank low in sales.
4. Model and econometric analysis
Here, we describe a model and our econometric analysis. Several previous works have dealt
with the analysis of Roadside Stations. Kikuchi, Taniguchi, and Ohgaki (2005), Kikuchi and10

Taniguchi (2006, 2007), and Taniguchi and Kikuchi (2006) performed rigorous analyses ofRoadside Stations but used a non-econometric method. Analysis using the least-squares method
is rare, but Takase, Koyama, and Mori (2002) used the least-squares method for bus use. However,
the estimation results were not accurate, and many results of the t value were not acceptable. In
addition, Shima (2011) used the dummy variable of the Roadside Station, but many of the results
were not significant. Nakamura, Yano, Maruyama, and Kikuchi (2008) used a probit model.
However, these are simple OLS (Ordinary Least-Squares) and not a simultaneous equation model.
We will consider what elements are important in increasing the sales amount. One of the mostimportant purposes of Roadside Stations is to increase sales. To increase sales, we can consider
many factors. One is to increase the number of visitors, and increasing the number of events is
also important, as is having a large parking lot. Moreover, providing good service is also crucial,
as is having a good restaurant. Well-maintained buildings and clean toilets are important. Further,
management expenses are an important indicator, as they are used for the many events andkeeping clean toilets, and thus increase the number of visitors. Additionally, having a large parking
space is important for sales. Conversely, the sales amount is important for having a large parking
space when building the Roadside Station, as stations that expect very high sales would build alarge parking space.
Based on the above, we now consider building the Roadside Station model. The six variablesconsidered—sales amount, parking space, number of visitors, number of events, management
expenses, and gross business expense—influence each other. Therefore, we have to be careful
about multicollinearity as many combinations exist. We created numerous models and obtained
the best estimation model. The following is the best-fit model of all estimations.
Sales amount = f (parking space, new grant)
Parking space = f (sales amount, Hokkaido dummy)
Number of visitors = f (number of events, management expense)
Number of events = f (sales amount, management expense)
Management expense = f (number of visitors, new grant)
Table 3 shows the estimated results. For the sales amount, we choose the parking space andNGS (dummy variable). A large parking lot makes it easy to approach a Roadside Station. A newstation attracts visitors and leads to an increase in sales. Stations that expect large sales would havea large parking space, as previously stated. Hokkaido (dummy variable) would have a larger
parking space than Honsyu, Shikoku, and Kyusyu. For the number of visitors, events attract
people to visit the Roadside Station. Clean buildings, especially clean toilets, attract many visitors.
Therefore, management expenses to keep the building clean affect the number of visitors. For thenumber of events, high sales amounts encourage more events to obtain many visitors. However,high management expenses make it difficult to have some events. Therefore, a negative sign is
expected. An increase in sales increases management expenses. We investigate how NGS deal
with management expenses.
The results in Table 3 appear robust. All t values are very good, and the estimated results are11

Table 3 Estimated results from the simultaneous equation modelNo.

Dependent
variable(1)

Sales amount(2)

Parking space(3)

Number of visitors(4)

Number of events(5)

Management expense

Independent
variable
Constant
Parking spaces
New Grant
Constant
Sales amount
Hokkaido dummy
Constant
Number of events
Management expense
Constant
Sales amountManagement expense
Constant
Number of visitors
New Grant

Coefficientt valuep-value-29697.2
1535.336
104674.9
59.44669
0.000237
47.43532
111.3778
27.63587
0.002394-3.16245
0.000068-5.5E-05-84757.2
371.8791-65764-0.2897
1.798355
2.367611
2.154245
1.820131
2.145034
1.058228
1.851784
3.653841-0.87322
2.749418-1.93971-2.21289
3.976228-1.51575

0.77310.07760.02140.03560.07420.03640.29430.06910.0006
0.38640.00810.05760.03090.00020.135

Elasticity
1.058

0.344

0.379
0.250
2.234
-0.411
3.603

reasonable. We calculated the elasticity for all variables except the dummy variables, which do
not have elasticity. We found a loop relationship between parking space and sales amount fromthe results of the econometric analysis in Table 3. A large parking space increases the sales amountbecause the coefficient is positive (1535.336). Likewise, a large sales amount has a positive effecton parking spaces (0.000237 in Table 3). Thus, a loop relationship exists between these twovariables. Similarly, the relationship between the number of visitors and management expense has
a loop.
In Table 3, the variables for parking space and sales amount are included. However, grossbusiness expenses are not. This means that gross business expense is closely correlated with thesetwo variables. Moreover, a multicollinearity problem exists with these variables. Therefore, we
could not obtain a strong result for the estimation. From the elasticity of Table 3, a 1% increase in
the parking space increases the sales amount by 1.06. Conversely, a 1% increase in sales increases
the parking space by 0.344. This demonstrates the loop relations as stated above. The Hokkaido
dummy has a positive sign; therefore, the station in Hokkaido has a wider parking space. From
Table 3, the sales amount of NGS is 104.6749 million yen greater than that of other stations.
Second, the management expense was 0.002394 to the number of visitors. Conversely, thenumber of visitors was 371.8791 to the management expense. Therefore, the loop relationshipbetween the number of visitors and management expenses is also demonstrated. In addition, Table
3 shows that NGS has a negative sign on management expense. Further, the sales amountincreases the number of events. In addition, there is a clear correlation between the increase in thenumber of events and the increase in the number of visitors. The loop relationships between thetwo variables are summarized as follows:12→ 1.06↑(1)（Parking space↑ ⇔ Sales amount↑） Loop
0.34↑←→ 0.25↑(2) （Management expense↑ ⇔ Number of visitors）Loop
3.60↑←
The above statements are summarized as follows:(1) A 1% increase in parking space↑→Sale amount increases 1.06%↑
Parking space⇔Sales amount↑) Loop relationship exists(Hokkaido (dummy)→Parking space increases ↑)New type: Grant↑→Sales amount 104.67 million yen ↑(2) A 1% increase in management expense↑→Number of visitors increases 0.25↑(Number of visitors↑⇔Management expense 3.60↑) Loop relationship exist
New type: Grant↑→Management expense ↓(3) Sales amount↑→Number of events 2.23↑→Number of visitors 0.38↑
Gross business expense is very important for sales. However, Table 3 includes no grossbusiness expenses. This is probably due to the multicollinearity among these variables, such as
sales, parking space, number of events, and management expenses. Appendix Table 2
demonstrates this and shows how gross business expense is important. All estimations show thatgross business expense is important and significant for almost all estimated equations. Appendix
Table 2 shows that the gross business expense has a high t-value for almost all factors. For example,
the first line of the estimation results shows that all t-values in line 1 are significant (the t-values
for the sales, the parking space, the number of visitors, the number of events, and the management
expenses are 2.148, 3.201, 3.545, 3.194, and 2.832, respectively). Additionally, the second line of
the estimation results shows that all t-values in line 2 are significant (t-values are 2.107, 3.178,
3.530, 3.278, and 2.793).
Further, the six lines of the estimation results show that all t-values in line 1 are significant (thet-values are 1.802, 2.823, 3.167, and 3.383). These show that to enter variables such as the new
grant dummy, the management expenses can be included. However, the t-values of the grossbusiness expense become smaller and nonsignificant if we include the parking space, the numberof visitors, and the number of events together. This is because these three variables and the grossbusiness expense are closely related to each other, and multicollinearity occurred in these cases.
This is only the case for the sales amount. However, for the other four variables (the parking space,
the number of visitors, the number of events, and the management expense), all t-values are large
and significant. These calculations show that gross business expense is a very important variablefor Roadside Stations.
Appendix Table 3 shows the DEA, which shows the efficiency of the station. The stations
such as Fresh Asago, Kasaoka Bay Farm, Inagawa, and Harima Ichinomiya are the top 15 in sales
amount. However, Totsugawa-go is located in a very mountainous area but has excellent
13efficiency. In addition, Onneyu Onsen (hot spring) is located in a very difficult-to-access location,
but its efficiency is the best among all stations.
Summary and conclusion
We performed numerous analyses of Roadside Stations, as discussed above, and the discussion
can be summarized as follows. First, the stations that received new grants had far better results
than the other stations (in terms of sales amount, gross business expense, and management
expense). Additionally, the sales amount, number of visitors, parking space, number of events,
management expenses, and gross business expenses have a simultaneous dependence on one
another. Therefore, we used various simultaneous equation models. Second, from the results ofthis estimation, we found that the number of stations that received new grant money increased by
147 million yen. Third, a 1% increase in the parking space increases the sales amount by 1.058%.
Conversely, a 1% increase in the sales amount increases the parking space by 0.344%. Fourth, a
1% increase in the number of events increases the number of visitors by 0.379%.
In addition, a 1% increase in management expenses increases the number of visitors by 0.247%.
A 1% increase in the sales amount increases the number of events by 2.234%. Conversely, a 1%
increase in management expenses decreases the number of events by 0.411%. Further, a 1%
increase in visitors increases the management expense by 3.603%.
These results demonstrate that the sales amount and parking space have a loop relation witheach other. In addition, management expenses and the number of visitors also have loop relations
with each other. These are important findings to determine how much the policy variable should
increase to obtain an increase in the goal variables.

14

Appendix Table 1 Ranking of 8 business contents of the top and bottom 20 stations(1) The top 20 stations
High
Ranking
◯
1
◯
2
◯
3
◯
4
◯
5
◯
6
◯
7
◯
8
◯
9
◯
10
◯
11
◯
12
◯
13
◯
14
◯
15
◯
16
◯
17
◯
18
◯
19

Sales
amount688243640000442751422731407000405429390000384300383782345000340000326000323000320000300000300000280000270000270000

Number ofvisitors
19
30
12
15
9
21
24
12
6
31
40
11
10
42
39
4
37
28
18

Number of
events
1
11
66
2
9
30
30
7
45
16
45
5
16
45
4
30
35
35
30

Parking
spaces
6
5
4
34
57
11
18
30
26
62
21
3
29
67
53
10
13
32
9

Gross business
expense
8
76
32
44
45
7
13
15
22
26
54
1
9
46
18
10
34
31
14

Management
expense
2
56
44
43
80
33
59
11
29
10
40
31
41
42
60
5
13
24
4

New Type
Grant
1
0
0
1
1
0
1
0
0
0
0
0
0
1
0
1
0
0
0

◯

269360

47

14

61

46

8

1

20

PFI
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

(2) The bottom 20 stations
Lower
Ranking
⚫
20
⚫
19
⚫
18
⚫
17
⚫
16
⚫
15
⚫
14
⚫
13
⚫
12
⚫
11
⚫
10
⚫
9
⚫
8
⚫
7
⚫
6
⚫
5
⚫
4
⚫
3
⚫
2
⚫

1

Sales
amount
44200
43000
40000
33000
32680
30000
30000
27500
26900
24000
23000
23000
20000
19000
18639
17305
16669
16000
11680

Number ofvisitors
67
63
71
36
33
15
75
77
79
21
66
62
77
71
70
80
67
60
57

Number of
events
56
15
56
56
21
66
55
23
23
35
66
13
55
23
66
66
66
55
35

Parking
spaces
80
77
67
12
51
2
19
64
78
53
63
34
76
42
52
45
70
59
53

Gross business
expense
57
33
51
19
50
6
74
36
75
58
67
28
76
46
37
72
71
62
76

Management
expense
55
47
27
17
28
9
54
75
64
50
70
35
51
73
78
72
46
56
35

New Type
Grant
0
1
0
0
0
0
0
0
1
1
0
1
0
0
0
0
0
0
0

340

74

66

79

76

24

0

15

PFI
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

Appendix table 2 Estimated results for gross business expense using several OLS methods
No.

(1)

(2)

(3)

(3)

(4)

(5)

Sales amount
Coefficientt value p-value
Constant
135755.200 6.088
0.000
Gross business
0.063
2.148
0.035
expense(Elasticity)*(0.197)
Adjusted R2
0.042
Constant
116635.400 4.798
0.000
New Grant
62097.060
1.840
0.070
Gross business
0.061
2.107
0.038
expense(Elasticity)*(0.191)
Adjusted R2
0.070
Constant
78184.700
2.816
0.006
New Grant
61824.760
1.896
0.062
Gross business
0.035
1.186
0.239
expense(Elasticity)*
Parking spaces
445.5442.596
0.011(Elasticity)*(0.309)Adjusted R2
0.132
Constant
102114.700 4.160
0.000
New Grant
45453.190
1.348
0.181
Gross business
0.036
1.176
0.243
expense(Elasticity)*
Number of
90.471
2.273
0.026
visitors(Elasticity)*(0.197)
Adjusted R2
0.116
Constant
108500.300 4.787
0.000
New Grant
15553.960
0.461
0.646
Gross business
0.024
0.850
0.398
expense(Elasticity)*
Number of events 6653.101
3.726
0.000
(Elasticity)*(0.252)2
Adjusted R
0.199
Constant
106461.100 3.719
0.000
New Grant
59976.270
1.763
0.082
Gross business
0.055
1.802
0.075
expense(Elasticity)*(0.171)
Management
0.399
0.679
0.499
expense(Elasticity)*
0.063
Adjusted R2

Parking spaces
Coefficient t value p-value
86.489
6.294
0.000
0.000
(0.261)0.101
86.301
0.611
0.000

3.201

Number of visitors
Coefficient t value p-value
217.146
3.544
0.001

0.002

0.000

5.642
0.029

0.000
0.977

(0.411)
0.124
160.501
183.970

3.178

0.002

0.000

(0.261)
0.090

4.940
-1.179

0.000
0.242

0.000

1.420

0.160

0.001

0.000

2.411
1.990

0.018
0.050

(0.473)
0.101
1.223
6.996

3.530

0.001

0.000
(0.454)0.215-1.313
6.978
0.000(0.402)0.155-39.191
182.556-0.584
2.317

0.561
0.023

0.000

2.035

0.045

(0.209)2.314(0.736)0.386
66.693-21.863

3.545

Number of events
Coefficient t value p-value
3.377
2.471
0.016

5.580

0.000

(0.314)0.029(0.537)
0.285
0.414
6.068
0.000

3.194

0.002

0.016

2.832

0.006

0.866
3.567

0.389
0.001

(0.233)0.079
25492.500
5313.810

5.492
0.825

0.000
0.412

3.278

0.002

0.015

2.793

0.007

-0.824
3.729

0.413
0.000

(0.230)0.075
23523.640
5299.867

4.272
0.820

0.000
0.415

2.239

0.028

0.014

2.398

0.019

0.004

(0.211)22.814

0.670

0.505

0.289
3.089

0.773
0.003

0.069
24689.430
4393.312

5.117
0.663

0.000
0.509

2.321

0.023

0.014

2.353

0.021

5.004

0.639

0.524

0.068
25882.860
7547.172

5.542
1.086

0.000
0.281

2.982

(0.338)
0.122

5.580

0.000

(0.384)0.339
82.089-23.484

5.599-1.077

0.000
0.285

0.000

2.102

0.039

0.005

2.982

0.004

4.441
-0.033

0.000
0.974

2.173

0.033

0.000

2.823

0.006

146.815105.669

2.246
1.086

0.028
0.281

0.000

2.643

0.010

0.017

2.917

0.005

2.173

0.033

(0.257)-319.248-0.868

0.388

1.712
1.916

0.091
0.059

3.167

0.002

(0.313)11.193(0.195)0.192
134.264178.501
0.000(0.244)0.000(0.209)(0.289)0.249(0.175)3.444(0.189)0.172
79.985-0.7050.072(0.379)0.670

Management expense
Coefficient t value p-value
27128.640
6.478
0.000

0.505

0.001

0.084

0.148

1.977
7.153

1.191
3.626

0.237
0.001

0.000

3.383

0.001

-0.8680.388(0.492)
0.639

0.524

0.000
0.212

*In this table elasticity was calculated only when the t value of the coefficient estimate wassignificant.

16

Appendix Table 3 Efficiency of the stations that obtained the new type of grants (DEA method)
Name of Roadside Station
Fresh Asago
Kasaoka Bay Farm
Totsugawa-go
Inagawa
Youka Tajima no kura
Shiozu-kaido Ajikama no sato
Ibuki no sato
Harima Ichinomiya
Onneyu Onsen
Minami Haga
l
s
a
i
p
q
e
r
m
x
k
v
w
u
z
y
zz

Efficiecy

Prefecture

1 Hyogo1 Okayama1
Nara0.822 Hyogo
0.803 Hyogo
0.798
Shiga
0.774
Shiga
0.748 Hyogo
0.723 Hokkaido
0.713 Hyogo
0.561
0.478
0.451
0.417
0.398
0.364
0.335
0.326
0.244
0.237
0.218
0.213
0.21
0.205
0.081
0.078
0.046

17

Name ofRoadside
Station
a
b
c
d
e
f
g
h
i
j
k
l
m
n
o
p
q
r
s
t
u
v
w
x
y
z
zz

Sales
Amount
6.88
4.23
4.07
3.9
3
2.69
2.5
2.4
2.24
2.2
2.2
2.08
2
1.92
1.85
1.55
1.3
1.2
1.14
0.72
0.57
0.5
0.43
0.27
0.27
0.24
0.23

Appendix Figure 1 Obtained elasticities for five variables

Sales Amount

1.2
1
0.8
0.6
0.4
0.2
0

Parking Spaces
0.4
0.3

Parking Spaces

0.2
0.1
0

Sales Amount
0.4
0.3

Number of Visitors

0.2
0.1
0

Number of Events

Management Expense

Sales AmountManagement Expense3
2

Number of Events

1
0
-1

4
3

Management Expense2
10

Number of Visitors

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