Title

Relationship between Shopping Streets and Community
Currency Circulation : A Case Study of the City of Musashino,
Tokyo, Japan

Author(s)Kurita, Ken-ichi; Miyazaki, Yoshihisa; Nishibe, Makoto

Citation

Discussion Paper, Series A, 235: 1-18

Issue Date

2011-02

URL

http://hdl.handle.net/2115/44845

RightsTypebulletin (article)

Additional
Information

Instructions for use

Hokkaido University Collection of Scholarly and Academic Papers : HUSCAPDiscussion Paper, Series A, No. 2011-235

Relationship between Shopping Streets andCommunity Currency Circulation
A Case Study of the City of Musashino,
Tokyo, Japan

Ken-ichi Kurita, Yoshihisa Miyazaki and
Makoto Nishibe
February, 2011

Graduate School of Economics & Business Administration
Hokkaido University
Kita 9 Nishi 7, Kita-Ku, Sapporo 060-0809, JAPANRelationship between Shopping Streets and Community Currency Circulation
A Case Study of the City of Musashino, Tokyo, Japan
Ken-ichi Kurita1, Yoshihisa Miyazaki2 and Makoto Nishibe3
Graduate School of Economics, Hokkaido University, JAPAN
0. Introduction
Community currencies (CCs) in the form of redeemable coupons (hereafter called “CC
coupons”) are currently gaining popularity in Japan. There are several types of couponsin Japan. Gift coupons are issued by various department stores or companies. They areusually used as gifts for special persons. They include beer coupons, book coupons andso on. Local coupons (or gift certificates) with a premium are usually issued by Chamberof Commerce in Japan. Local governments often bear expense of such a premium byusing tax money to lift the local economy. In 1999, merchandise coupons were also
issued by the Japanese central government to the heads of households who havechildren under 15 years old and the people aged 65 or older who meet certain
requirements. They were introduced to stimulate consumers’ demands and escape fromprolonged depression. These coupons in general have expiration dates. Consumer’s
willingness to buy in the community was supposed to be encouraged by putting apremium on the coupons and setting expiration dates.
This type of community currency (CC) is adding vitality to local communities by its
use in both commercial and non-commercial transactions, bridging the gap between
volunteer activities and the economic activities of local shops. They were introduced in
an attempt to overcome the problems encountered by earlier CCs used in Japan. There
are several previous researches that have examined the economic effects of CC coupons.
Coe (1938) noted how their use in large shops and redemption would become obstacles
to their circulation. Nishibe (2005, 2006a), Kichiji=Nishibe (2008) and Yamazaki (2008)
verified the economic effects of CC coupons by considering their redemption, turnoverand velocity of circulation. They also traced the circulation paths of CCs, showing whatkinds of transactions they mediated and how they came to circulate within thecommunity (Nishibe, 2008; Kichiji=Nishibe, 2008; Yamazaki=Yahagi, 2009). Nishibeand others showed how the use of CC coupons for non-commercial transactions
produced created new demands for a local economy by the following successive uses forcommercial transactions.
Email: kuririne@nifty.com
Email: frontier-spirit-21-y.m@nifty.com
3 Email: nishibe@econ.hokudai.ac.jp121

It had been known in case of “Eco-money” only usable for non-commercial services
that participants could not help but to store up CCs they received in exchange for their
non-commercial volunteer aids because they could neither find any other services theywant nor use them at local shops. This problem prevented Eco-money from circulatingsmoothly.
CC coupons that allow only shops to exchange for cash have been adopted in Japanin order to solve the problem. But, it seems to be another problem that in the case of CC
coupons, local shops, instead of using them for other local shops or non-commercial
services, are apt to redeem CC coupons immediately after they receive them. This ismainly because most shops allegedly need cash to buy merchandises from outside theirown community. Thus inclination of local shop to redeem CC coupons as soon as possible
hinders active circulation of CC coupons.
When this happens, the relationship between shops’ comprehension and behavior,and the circulation of CCs becomes crucial. In order to make redeemable CC coupons
successfully circulate in its community sphere, shops need to comprehend the purpose of
the CC, and commit themselves to take a positive stance on circulating them wherever
possible, rather than just redeeming them.
This article will try to show the effects of shops’ comprehension and behavior on CC
circulation. Section 1 reviews the history and development of CC in Japan. Section 2
gives an outline of the CC coupons introduced in the Central District of Musashino City,
Tokyo (hereafter called the Central District). Section 3 analyses the results of acirculation experiment, and examines the relationship between shops’ comprehension
and behavior, and the CC circulation. Section 4 coordinates the results of the analysis
and draws conclusions on the significance of the CC coupons, and finally notes issues
that remain to be studied.

1. The history and development of CCs in Japan
1-1 The appearance of various CCs by 21st century
In early modern Japan, there were a number of systems resembling CCs, such as “Yui”
and “Kou”. The former was a kind of mutual aid system that lends and borrows laborson the basis of each other’s promises within village and other communities. The latter
was a means for pooling not only labors but also monies or goods to use them where andwhen needed. Moreover, Han, the domains controlled by feudal lords used to issue“Hansatsu” in order to solve local financial difficulties in the Edo period (1603-1868).
But they were abolished and consolidated into “yen” (the Japanese official currency),
but the “Yui” and “Kou” type of systems have survived in a small way.
2

In recent years, a variety of CCs have appeared since 1970s. The first to draw
attention were “Volunteer Labor Bank” and “Eco-money”4. In 1973, Shoko Mizushima
formally established “Volunteer Labor Bank”. Participants received in-house credits
instead of wages in “yen” as payment for their volunteer work. One hour of volunteer
work was calculated as one point, and the points amassed by a participant could beexchanged for labor among themselves. This activity is similar to mutual assistancesystems such as “Time Dollars” which were later set up, mainly in America (Lietaer,
2004, p.4). A number of time-deposit style CCs later appeared, inspired by the“Volunteer Labor Bank” notion5. Some foreign CCs also became known in Japan, such as
the Canadian “LETS (Local Exchange Trading System)” and the U.S. “Time Dollars”
and “Ithaca Hours”, and these greatly affected the implementation of CCs. An official of
the former Ministry of International Trade and Industry, Toshiharu Kato, proposed theconcept of “Eco-money”, modeled on the idea of “LETS” and “Time Dollars”. “Eco-money”
circulates within districts, re-evaluating various environmental, social welfare,educational, and cultural values (Kato, 2001, p. 23). The use of “Eco-money” has spreadthroughout Japan, drawing great interest as a tool for revitalizing local communities.
From the 1990s up to the beginning of the 21st. century, Japan experienced a boom in
the appearance of CCs6. The CCs that appeared in Japan can be classified into threemain types, according to their purposes (Table 1). First, there are “Volunteer Labor
Bank” and “Eco-money” type of CCs. This type is used as a form of mutual assistanceand to promote social interchange. Secondly, there are CCs for supporting projects. This
type is issued in order to support various local community projects along the line of“Community Way”. Thirdly, we have the CCs which aim to act as an economic stimulus.
This type is used among businesses and shops to invigorate trade. Thus we can see
various types of CCs co-existing in Japan today.

See Izumi (2006) and Lietaer (2004) on the early CCs in Japan.
Later, time deposit type of CCs, called “Fureai Kippu” system by Tsutomu Hotta, the Director of the Sawayaka Welfare
Foundation spread domestically in Japan.
6 The three reasons why CCs were noticed were as follows: 1) The Hanshin earthquake created momentum for
more active civic movements, 2) the country fell into long-term recession following the bursting of the bubble
economy and the Asian currency crisis, and 3) NHK, the Japanese public TV broadcaster, put out a documentary on
author Michael Ende which dealt with the issue of money [Ende’s will].
453

Table 1. Classification of community currencies.
Bases

Objectives

Case examples

Volunteer

To promote mutual assistances and social
interchanges

Eco-Money (Japan)
Time dollar
Volunteer Labor Bank

Project

To support such various local community
projects as town development using CCs

LETS
Earth day Money (Japan)
Atom Currency (Japan)
Chiemgauer

Business

To invigorate commercial trades
among local businesses and shops

WIR BANK
RGT
Ithaca Hours

Note: This table was made by reference to Nishibe (2004, pp. 24-28).
1-2 The appearance and development of CC coupons
In around 2002, the central government proposed a variety of policies related to CCs
that were taken up in many parts of the country (Nishibe, 2006b). One of those was asystem of special zones for structural reform and aimed at relaxing regulations in orderto revitalize a district. There are also other instances of central government and local
ones in Japan supporting attempts to establish CCs, with offers of subsidies andplatforms using computer network systems. Under such circumstance, CC coupons werefirst issued in the Rubeshibe Town, in Hokkaido. The local coupons that had been in use
until then were exchanged for cash immediately after use, making it impossible forthem to circulate as a currency and thereby to create additional demand that would
promote ongoing purchasing activity (Nishibe, 2004, p. 28). Then local coupons thatincorporated the idea of a CC appeared. However, then the law did not clearly prohibit
multiple circulations of local coupons before redemption, and so Rubeshibe Town
applied for being adopted as economic special zones and requested the government forreconfirmation of multiple circulation. As a result, the regulations were relaxed and theissue of multiple circulation local coupons was permitted.
Furthermore, in March 2005, the Osaka Healthy Community Creation Special Zone
and the Kitakyushu Community Currency Special Zone were established as special
zones for CC purposes, and regulations regarding the issue and circulation of CC were
relaxed. As a result, three types of CC coupon came into being: “Genki” in Neyagawa
City, and “Ippo” in Suita City, both in Osaka; and “Orion” in the Yahata West district of
Kitakyushu. In 2007, the special measures regarding regulations were implemented
4

nationwide, enabling awareness of CC coupons across the nation. In response, thevillage of Sarabetsu in Hokkaido set up an incorporated nonprofit organization andissued “Sarari”. This was usable not only for volunteer activities and local shopping but
also for payment of public utilities and facilities as well as local taxes.
1-3 Special features of CC coupons
The special features of CC coupons are that they are multiple circulation local coupons
for use within a local district for both commercial and non-commercial transactions.
They can be used for volunteer dealings, buying goods in shops, and paying foradministrative services. They were introduced in order to overcome the limits of thepreviously used CCs, local coupons and stamps. Unlike those earlier local coupons andstamps, they need not be cashed in immediately after use, but instead can be
re-circulated. This type of CC also differs from the “Eco-money” type of CC in that theirsphere of use is not limited to non-commercial transactions, but can also be used forcommercial transactions (Nishibe, 2006a, p.338). This mechanism is known as “Double
Triangle System [DTS]” (Nishibe, 2004a, 2008, Kichiji=Nishibe 2008).
With DTS, “CC circulation in non-commercial transactions is pulled along by CC
circulation in commercial transactions, thus the mechanism allows for a smoothercirculation of the CC, and is an attempt to overcome the difficulties of CC stagnationand continuity in transactions” (Nishibe, 2008, p. 291). The DTS forms a link between
commercial and non-commercial transactions, broadens the realm of circulation of theCC, and invigorates volunteer activities, mutual assistance and economic activities. The“yen” and local coupons are not ordinarily used in non-commercial transactions such as
volunteer activities and mutual assistance, whereas CC coupons are used in suchtransactions, making their range of possible use more varied. As a result, CC coupons
form a link between citizens who undertake non-commercial transactions andbusinesses who undertake commercials ones, thereby fulfilling a role of building social
capital. Table 2 shows the differences between CC coupons, “Eco-money” type of CCs,
local coupons, and stamps.

5

Table 2. The differences among CC coupons, “Eco-money” type CCs, local coupons and stamps.

CC coupons

Transaction types
How to get
How to use
Circulation“Eco-money” type of・Commercial
・Non-commercial
・Purchase・Volunteer work・Shop
・Volunteer work

Local coupons

StampsNon-commercial

Commercial

Commercial

Volunteer work

Purchase

Volunteer work

Shop

Shop

Multiple

Once

Once

CCs

Multiple

Giveaway
Promotion

2. Outline of the CC in Central District of Musashino City
2.1 Background to the introduction of the CC
The preceding section looked at the history and development of CCs in Japan, andbriefly documented the process-giving rise to CC coupons. Given that CC coupons haveattracted such attention in recent years in Japan, this section will focus on the case ofMusashino City in Tokyo. Musashino City has an abundance of commercial
establishments and educational institutes, with the tertiary sector providing the maineconomic support. The financial capability index, which shows the strength of the city’s
financial base, is very high, confirming that Musashino is an affluent city. However, theproportion of the elderly is on the increase. Central District, which is the focus of thisarticle, has several merchants’ associations, and fully engages in festivals and otherlocal activities. And yet the drawn-out recession together with the opening of large-scale
stores has meant that the shopping streets in Central District are gradually going into
decline. There are three background issues relating to the introduction of the CC.
The first is the impasse in trade stamps. Trade stamps came to be issued throughout
Japan as a way of retaining customers and adding vitality to shopping districts. They
were important tools for creating a bond between consumers and local shops.
Musashino Central District Shopping Streets Federation (hereafter called Federation)
implemented trade stamps as a part of its consumer services. The affiliated businesses
which dealt in the stamps gave customers one stamp for every 100 yen spent.

6

Customers then stuck the stamps on to the card provided7, and when they had amassed
350 stamps, they could use them for 500 yen’s worth of purchases8. Furthermore, thestamp cards could be saved up and exchanged for a variety of benefits. The stamps not
only encouraged consumers to buy more, but also at the same time increased purchaserates in the affiliated shops, and served to keep consumption within the district.
However, trade stamps are on the decline due to the steep drop in sales turnover and in
the number of affiliated stores. Consumer interest in stamps has also waned, andstamps no longer provide the means for bonding between consumers and the shopping
district.
The second issue is the weakness of links between different groups. Various groups
are undertaking local activities in Central District, but there appears to be no strong
links between them. Such links are necessary to energize the community, but they are
inadequately forged.
The third problem is the aging of society and the decline of mutual assistance. An
aging society brings with it a host of problems. Senior citizens find it increasingly
difficult to get out to the shops as they get weaker on their legs. With few opportunities
to get out and about, the feeling of isolation increases, and they become more and more
estranged from their local communities. Relations with local residents also become
weaker, and mutual assistance dwindles.
Central District is experiencing just the types of problems outlined above. These canonly be resolved with co-operation of the groups and local residents. A CC has thepotential to bring about co-operative relations between the various groups and local
residents, thus strengthening the social capital. Groups and local residents can use CC
to add vigor to shopping streets, accommodate an aging society, and promote inter-grouplinks and mutual assistance. Federation decided to introduce CC as a way of exploiting
this potential.
2.2 The design and circulation scheme of Muchu
This section will outline the design and the circulation scheme of the CC introduced into
Central District. The design is shown in Figure 1. Under the name Muchu (hereafter,Mc), 50 Mc is equivalent to 50 yen. Mc was introduced in order to promote inter-grouplinks and mutual assistance, and thereby invigorate the local community and the local
economy.
7 Information about stamps is based on materials kindly provided by Federation.
8 They could also be peeled off the stamp card and used in 100 yen units. Since customers received one stamp forevery 100 yen they spent in an affiliated shop, spending 35,000 yen would bring them 350 stamps. That has a valueof 500 yen, making the dividend to the customer around 1.4%.

7

An outline showing how its experimental circulation was implemented is shown in
Table 3. There was a two-phase implementation planned, over a period of around six
months to a year, starting in 2008. 11 shopping streets took part, with some 140
affiliated shops. The total issue was a first phase of around 3.7 million yen, and a second
phase of around 2.7 million yen. The amount of money redeemed came to around 3.5
million yen and 2.5 million yen respectively in the first and second wave, meaning that
more than 93% was eventually redeemed. The first issue was carried out by NPOs, thesecond by local merchant’s associations.

Figure 1. The front (left side) and the back (right side) of Muchu.
Table 3. An outline showing how its experimental circulation was implemented.
First-stage

Second-stage

07/2008-03/2009

05/2009-03/2010

2. The total number of affiliated stores

145

141

3. The total amount of CC in circulation¥3,770,200¥2,735,400

4. The total amount of CC redeemed¥3,513,100¥2,556,600

5. Rate of CC redeemed

93.2%

93.5%

6. Issuers of CC

NPOs

Local merchants’ associations

1. Experimentation period8Mc was issued by 2 methods. Table 4 shows the details of the total amounts issued.
In the first method, Mc was bought in by the various groups and merchants’
associations, and distributed to local residents as rewards for community activities andgiveaway promotions from shops. The community activities included 1) help withfestivals, 2) help with other events, 3) communal cleaning, 4) flower growing activities,5) collecting the caps from plastic bottles, and 6) forgoing the use of plastic carrier bags9.
In this circulation experiment, the various groups and merchants’ associations bought
Mc at a rate of 60 yen per coupon, and distributed them to the volunteer workers andother recipients10. Federation also gave away some Mc to groups and residents as a formof advertising. In the second method, local residents bought Mc directly and used themin the shopping streets. In this case, Mc came with a 20% premium for a limited period11.
A local resident buying 1,000 yen’s worth (20 coupons) of Mc, received a premium of 200
yen (5 coupons).

Table 4. The details of the total amounts issued.
First-stage
1.Rewards for community activities orGiveaway promotions
Way ofissue 2.Donation
3.Purchase by consumers
Total

%

Second-stage¥957,500

25.4¥1,427,900

52.2¥555,000

14.7

¥0

0.0

¥2,257,700

59.9¥1,307,500

47.8¥3,770,200 100.0¥2,735,400 100.0

Next, we come to how Mc was used. Local residents who had received or bought Mc
used them to pay for mutual assistance, as donations, for shopping streets, for thecommunity bus, and at events such as festivals. Mc could also be stuck on to the stamp
9 When a customer declines to take a plastic carrier bag at the checkout, they receive the point, and when a certain

number have been amassed, they can be converted into CC. In Japan, the ‘no plastic bags’ movement is boomingfrom the environmental conservations standpoint.
10 Since the face value of the CC is 50 yen, the 10 yen difference goes to running costs. That is to say, for every
coupon bought by the groups and merchant’s associations, 10 yen is contributed to running costs.
11 There are no differences in function between these and the previous issues, the only distinguishing feature beingthat the character toku, meaning ‘special’ is printed in a red circle in the top right of the coupon.

9%

cards. Shopkeepers who took Mc also sometimes used them in other shops. Only
affiliated shops in principle were allowed to redeem Mc they had taken for yen.
Residents and shops could also donate Mc. The donations received were converted into
yen and given as relief money to victims of disasters, funds for guide dogs for the blind,and social welfare councils. Mc had a time limit on their validity. The distribution flowof Mc is set out in figure 2. The arrows show the direction of the flow. Mc re-circulated
again and again among the groups and residents, eventually being redeemed for yen byshops or the company running the community bus.
In these ways, Mc, issued as CC coupons, has been bearing fruit. However, problems
have also appeared. In particular, many of Mc given as reward for activities wereredeemed as soon as they had been used in shops. The next section investigates the
problem of shops redeeming Mc from the standpoint of the shops’ comprehension andbehavior.

Issue
The various
groupsIssue andRedemption

Merchants'

OfficeAssociations

VolunteerConsumers

workers

Redemption
Community
Bus

Donation

Local Shops
Circulation

Volunteer

Local Shops

workers

Figure2. The circulation flow of Mc.

10

Local Shops

3. Issues arising from the experimental circulation of CC
3-1 Issues
Some Mc were given as gifts and rewards for community activities. These were thenused mainly in local shops and for the community bus. Kurita focused on the
consciousness and behavior of general local residents, and ascertained the effects ofintroducing Mc. According to Kurita (2010), Mc gradually brought about positive effects
after being issued in the form of CC coupons, transforming both the consciousness ofinter-group links and also consumer behavior. However, there was one big problem with
Mc: the shops immediately redeem Mc. Many of the coupons given to and bought by
local residents were used in the shopping streets and then redeemed（Table 5）. Mc
received by shops could have been used in other shops, given as a reward for mutual
assistance, used for the community bus or given as a donation, but many of Mc issued
ended up being redeemed even before the expiration date of it（Table 6）.

Table 5. The redemption rate of Mc by shops.
Implementation period

The redemption rate of Mc by shops (%)

First-stage

98.4

Second-stage

97.7

Table 6. The redemption rate of Mc even before the end of the experimentation.
Implementation period

The redemption rate of Mc even before the end of
the experimentation (%)

First-stage

46.8

Second-stage

66.6

From this we can see that the shops’ comprehension and behavior exert an effect on
the circulation of Mc. For the CC coupons to circulate in multiple times, the shops need
to be fully aware of the significance of the CC and the ways to use it, and to make bestuse of them accordingly. If a shop uses Mc as gifts and in other shops, then that value
remains in the community. But when a shop redeems the Mc for yen, then it is lost fromthe local community. It is therefore important for promoting circulation that shops try to11refrain from redeeming the coupons but instead re-use them 12 . However, earlier
research has not adequately taken up this issue, which led us to believe that it isnecessary to analyze the effects of shops’ comprehension and behavior on the circulationof Mc. The next section investigates the relationship between shops’ comprehension andbehavior and the circulation of CC coupons, focusing on the results of Mc. Some
problems are also brought to light.
3-2 Survey method
To carry out the research survey mentioned above, the Central District Shopping
Streets were selected for doing face-to-face questionnaires and interviews. Shops where
Mc had been accepted were targeted, and asked about their comprehension of Mc andtheir ways of using it. There were 106 shops where Mc had been accepted through either
the first or second circulation phase. Of those, 84 agreed to take part in the survey. The
survey asked about comprehension of Mc, whether or not it was redeemed for yen, andhow it was used. To investigate the level of comprehension of Mc, six of Mc’s features
were asked about. There were also questions about changes after the introduction of Mc,
together with opinions and demands relating to Mc. The interviews were in open-ended
format. The survey was carried out in two stages in October and November 2010.
3-3 Results
3-3-1 Degree of comprehension of Mc
In order to survey the degree of comprehension of the CC, subjects were asked if theyknew about the features of Mc. For each of six features that a subject knew about, 1
point was given, making a maximum of 6 points. The six features of Mc are as follows: 1)
Mc can be used as reward for volunteer help work, 2) Mc can be donated to welfare andenvironment protection groups, 3) Mc can be used in affiliated shops, 4) Mc can be usedat festivals and other events, 5) Mc can be stuck on to stamp card, 6) Mc can be used in
multiple times within the district without having to be redeemed. Table 7 shows theaverages and standard deviations for the levels of Mc comprehension. Table 7 shows theoverall comprehension levels and the levels for each of the component features.
The overall comprehension level average was 4.83. Given that the maximum score
was 6, we can see that the main features of Mc were to some extent comprehended. So
what about the individual features? Table 7 reveals that shops comprehend thepossibility of re-circulating Mc as a volunteer activity reward, in affiliated shops, and at

12 This problem also arose in the 1930s with the Prosperity Certificates issued by the Canadian province of Alberta.

See Coe (1938).

12

festivals. The other two features, donation and stamp card use was not well known byshops. In other words, despite being comprehended to some extent, there was somevariation across features.

Table 7. The averages and standard deviations for levels of comprehension of Mc.
Mean

SD

4.83

.82

1. Usable as reward for volunteer help work （0,1）

.83

.38

2. Usable as donation （0,1）

.60

.49

3. Usable in affiliated shops （0,1）

.99

.11

4. Usable at festivals and other events （0,1）

.87

.34

5. Usable as a stamp card （0,1）

.69

.47

6. Usable in multiple times （0,1）

.86

.35

The overall comprehension level (0,6)
Each of the component features

3-3-2 Level of use of Mc by shops
The next item to be surveyed was whether or not shops reused Mc. Table 8 showswhether shops that accepted Mc reused some of them instead of redeeming all of them.
58.3% of shops redeemed all of Mc received. 41.7% reused all or part of Mc received.
This rate of reuse is relatively high compared to other CC coupons in Japan. For
example, the rate of reused CC coupons in the first experiment of Tomamae-cho, in
Hokkaido was around 19.5% (Nishibe, 2005; 2008, Kichiji=Nishibe, 2008). Thus, unlike
other local coupons, the high rate of Mc re-circulated inside the community instead ofbeing redeemed immediately after receipt.
Let us see what shop reuse Mc for. Table 9 details the ways of reuse made by shopsof Mc received. Calculations were made as follows: if shop A had three Mcs and reused
the first Mc in shop B, the second one in shop C, and the third one for the community
bus, these were counted as Mc having been used twice in shops and once on thecommunity bus. In this case, the number of Mc used amount to three times regardless of
the amount of Mc used. From table 9 we can see that 88.6% of Mc was reused in shops.
Thus the proportion of Mc is circulated in multiple times as if it was a CC to bring about
consecutive transactions, which leads to a knock-on effect similar to so-called a13

“multiplier effect” to create effective demand. On the other hand, 58.3% of shops
redeemed all of Mc received. If those shops failed to adequately understand thesignificance of Mc, then they would redeem all Mc received straight away. It could bethat differences in the level of comprehension of the CC affected levels of its reuse.
There could be differences in the levels of comprehension of Mc between the group who
reused some Mc and the group who redeemed all Mc, which could have had an effect on
the circulation. The next section looks at whether there is in fact such a difference
between the reuse group and the redemption group. It then investigates therelationship between comprehension of the CC and its redemption.

Table 8. Rate of reuse of the MC by shops.
Behaviors of shops%

Redeem all of Mc received

58.3

Reuse all or part of Mc received

41.7

Total

100.0

Table 9. The use made by shops of their MC.
Use Route

The number of times

1. Local Shops

47

2. Community Bus

2

3. Donations2

4. Gifts

2

Total

53

3-3-3 The relationship between comprehension of CC and redemption
Table 10 shows the rates of the number (26) of Mc reuse shops in the total number (53)of shops of the group with above average comprehension of Mc, and the rate of thenumber (8) of MC reuse shops in the total number (30) of shops of the group with below
average comprehension13. The group with higher comprehension of Mc has higher reuse
13 We could get the information of 84 shops about redemption, but one of them refused to answer on thecomprehension of CC for personal reasons. As a result, the relationship between shop’s comprehension and theirredemption was analyzed on the basis of the data of 83 shops here.

14

rate (49.1%) than that (26.7%) of the group with lower comprehension. The difference(22.4%) between the rates of use of the two groups is statistically significant (p<.05).
Therefore, the group with the higher comprehension of Mc tends to reuse it in a positive
manner, while the group with lower comprehension tends to redeem it. So we can ask
which features of Mc the redemption group inadequately comprehended. Table 11 shows
the differences in comprehension levels for each feature between the reuse group andthe redemption group. There was no great difference between the two groups in theirlevels of comprehension of Mc’s usability 1) as reward for voluntary activities, 3) inaffiliated shops or 4) at festivals and other events. But there was a great difference
between two groups in their levels of comprehension of its usability 2) as donations, 5)
as the stamp card and 6) in multiple times. With regard to these three items, the reusegroup had significantly higher comprehension levels than the redemption group.
Remarkably, the difference (24.5%) between the two groups in comprehension of 6) Mc’s
usability in multiple times within the district is statistically significant (p<.01). This isparticularly important. If a shop comprehends that Mc can be used in multiple times, itwould not possibly redeem all Mc it received, but reuse at least some of Mc, whereas
complete ignorance of this feature would leave redemption as the only option. According
to Table 7, although Mc’s usability in multiple times is widely known, analysis of thedata when broken down into two groups reveals that the group who redeemed all of Mc
received has a relatively low comprehension of this fact (Table 11）. This means thatamong those who redeemed all of their Mc, there are some who do so in ignorance of thefact that the currency can be circulated in multiple times.

Table 10. The proportions of MC reuse in the group with above average comprehension ofMc and the group with below average comprehension.
The group withabove averagecomprehension (%)

The group withbelow averagecomprehension (%)

Difference(%)

p-value

The rates of use

49.1

26.7

22.4

.046**

N

53

30

Note: ***p-value<.01; **p-value<.05; *p-value<.1, two-tailed test.

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Table 11. The differences in comprehension levels for each feature between the reuse group and theredemption group (%).
The reusinggroup

The redemption
group

Difference

p-value

1. Usable as reward for volunteer help
work

88.2

79.6

8.6

.462

2. Usable as donation

79.4

46.9

32.5

.006***

3. Usable in affiliated shops

100

97.1

2.9

.853

4. Usable at festivals and other events

88.2

85.7

2.5

.997

5. Usable as a stamp card

79.4

61.2

18.2

.079*

6. Re-usable multiple times

100

75.5

24.5

.005***

34

49

Each of the component features

N

Note: ***p-value<.01; **p-value<.05; *p-value<.1, two-tailed test.

4. Discussion and implications
The CCs in Japan have experienced their peculiar process of evolution. At first, thevoluntary based CC called “Eco-money” had gained popularity among community
activists. They were introduced to develop mutual support among people who lived in
the same community. However, since their sphere of use was limited to suchnon-commercial transactions as volunteer services and mutual aids, they could not gain
broader use routes. As a result, the people who did not need to get mutual support fromothers by using the currency received tend to hoard it without being able to find anotheruse except non-commercial transactions. To overcome this problem, CCs that are usable
not only for volunteer services, but also in local shops or for payment of public utilities
have emerged and become widely popular in Japan. Since local shops need to stock up
with more or less merchandises from outside the community, it was reasonable to makeCCs redeemable for local shops. A new type of CC in the form of coupons has thus
evolved in order to overcome the weakness and succeed the strength of previous ones.
In this article, we have expounded the background to the appearance of CC couponsin Japan, focused on the example of Musashino City and its experimental circulation ofMc, and detailed its implementation. We have also examined the issues surrounding CC
coupons. The most distinctive feature of CC coupons is redeemable for yen and usable
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for both commercial and non-commercial transactions. But once CC becomesredeemable in this way, the majority should finally be used in local shops and redeemedby the end of expiration date. As a matter of fact, not negligible shops are inclined toredeem them immediately.
In the last section, we demonstrated that there is the statistically significant
difference in the rates of reuse between the group with above average comprehension ofMc and the group with below average comprehension of Mc, that there is also thestatistically difference in comprehension levels of Mc between the reuse group and theredemption group, and that there is the statistically significant difference in thecomprehension of such each feature of Mc as usability in multiple times between thereuse group and the redemption group. We presume from the results thus obtained that
local shops’ comprehension of the features and significance of Mc would eventually havea great influence on such their behaviors as either reuse or redemption of Mc and as aresult on its average turnover. The cause of the problem might be that it is hard forshops to recognize the essential difference between CC coupons and other coupons suchas local coupons or merchandise coupons. For, since CC coupons are redeemable just asother coupons, shops without interest in CCs often misconceive that both of them are
the same as mere “money”.
As a result, we have concluded that there is a fear that shops’ low comprehension ofcertain features of any redeemable CC leads them to redeem them immediately without
re-circulating them. Truly, each shop’s improvement of comprehension does notnecessarily lead to avoiding redemption. Some need to redeem immediately almost all ofthem to lay in new stock even after they come to a better comprehension. Others may
lose opportunities for using them because there are very few affiliated shops near theirsettled areas. In these cases, improvement of comprehension has no relation withredemption. Consequently, comprehension level is not the only factor affecting thecirculation of the CC. The nature of particular businesses of a shop and thecharacteristics of a particular area may be exerting a big influence. These factors need
to be analyzed in a future research.
But if local shops tend to redeem CC coupons without taking into consideration what
they are usable for and how they become effective in vitalizing local economies, it would
then be vital to adopt more effective means to let local shops know the necessary
information and understand significance of CC coupons so as to get them circulative toattain their goals.

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