Discussion Paper Series No.101

Ecotourism Development andManagement of Common Pool Resources: A Study of Japanese Rural Communities

Masahiro Yabuta
September, 2008

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Ecotourism Development and Management of Common Pool Resources: A Study of Japanese Rural Communities
By Masahiro Yabuta** Faculty of Economics, Chuo University,

yabuta@tamacc.chuo-u.ac.jp

Abstract
This paper is about the relationship between the development of eco-industries such as
ecotourism and the community. From the theoretical perspective, we shall introduce the (Common
Pool Resources) CPRs approach that enables us to treat regional resources such as the naturalenvironment and cultural heritage as the common. Because of the properties of low-excludability
and high-rivalness of CPRs, the community must manage the use of CPRs adequately. From anhistorical perspective, such CPRs have been managed in the rural community for a long time as
indispensable resources, primarily for agriculture, forestry and fishery. It is proven by the model
analysis that the management of CPRs is highly related to the cooperative behaviour of thecommunity and to sustainable development through CPR-related industries such as tourism.
Moreover, empirical research on factors that determine the management system of CPRs in Japaneserural areas will be discussed. By using the data of the 2005 Census of Agriculture and Forestry inJapan, cooperative behaviour in the community related to land use or traditional cultural events, andthe structure of community-based participation, will be investigated. The plan of the paper is asfollows. Section 2 explains the common pool approach of the management of CPRs for eco-industry,including ecotourism as a typical example, and mentions related studies from the theoretical as wellas empirical perspectives. Section 3 develops a theoretical model to show the close relationshipbetween the management of CPRs and eco-industry development. In section 4, the procedure for
performing an empirical study of Japanese rural communities is explained; and in section 5, themajor findings of the model estimates are shown. And finally, section 6 outlines the main findings
and conclusions.

Key Words: Ecotourism, CPRs approach, Cooperative behavior, Community-based participation,
Sustainable management
JEL Classification: R11, Q56
Acknowledgement: I gratefully acknowledge the financial support of Grant-in-Aid for Scientific
Research(C), 2006-2009 by Ministry of Education, Culture, Sports, Science andTechnology of Japan2

1. Introduction
The tourism industry, as a typical regional eco-industry, should regard resources like the naturalenvironment and cultural heritage as inherent factors determining the attractiveness of the tourism
site. In this regard, tourism is very similar to agriculture, forestry, fishery and related industries that
also need to preserve the environment adequately. Not only famous tourism sites in Japan like Kyoto
and Yakushima, but less famous sites with beautiful landscapes in rural areas, also have sufficient
tourism resources, replete with a historical and cultural heritage and an ecosystem. Hence, it isnecessary for the stakeholders in these regions, such as residents, farmers, firms and public services,
to manage these resources properly. They need to invest in a part of resource depreciation, to control
the level of resource use and to incorporate economic incentives to enforce regulations. From thehistorical viewpoint, it is apparent that such control or management of regional resources has beenthought of primarily in connection with primary industries like agriculture, forestry and fishery.
These nature-based industries have developed with religious beliefs and have produced a strong
cultural heritage and region-specific festivals. Accordingly, we are now in their debt.
In particular, it should be noted that regional resources like the natural environment andcultural heritage have a specific character with low excludability and high rivalry. Because
everybody in the community can use these resources, they may also overuse them, leading to theirover-exploitation. Resources with low excludability and high rivalry are called (Common PoolResources) CPRs. Therefore it is very natural to conclude that CPR-related development in theregion for the long term should be promoted through the proper management of CPRs. The
development of primary industry or the tourism sector in the region cannot be sustainable without
proper management of CPRs.
The main purpose of this paper is to prove the existence of a close relationship between
regional development and the management of CPRs primarily from an eco-industry perspective. It is
our hypothesis that the more cooperative the behaviour in a community, the better the regionalsocio-economic situation will be both from an economic and environmental perspective. It is also
our task to provide empirical research regarding factors that determine the system and the situationof the management of CPRs in Japanese rural areas. The composition of the paper is as follows.
Section 2 explains the common pool approach to the management of CPRs and mentions related
studies from the theoretical as well as empirical perspectives. Section 3 develops a theoretical model
to show the close relationship between the management of CPRs and eco-industry development.

3Section 4 gives an overview of the present situation of Japanese rural areas and communities. In
section 5, we explain procedures for how to conduct an empirical study of Japanese ruralcommunities. In addition, their cooperative structure is explained and the major findings of themodel estimates are shown. And finally, section 6 outlines the main findings and conclusions.
2. Common Pool Approach and Eco-industry
2.1 Development of Ecotourism Policy in JapanAs we have already mentioned, there must be a co-development relationship between thepreservation of CPRs as regional resources and the growth of the eco-industry. Hereafter, we shallfocus our research on ecotourism development as a typical eco-industry and the management of
CPRs for ecotourism development in the region.
Recently sustainable tourism, or ecotourism, has become very popular. It means sustainable
development of the rural areas. The tourism sector is important in leading the regional economy
towards high economic growth. As far as Japan is concerned, for example, due to the hugedivergence between inbound and outbound tourism, policies have focused on increasing inboundtourism to 10 million per year. In Japan, as in other countries, with the conversion of the industrial
structure the migration from rural villages to cities has caused economic and social decline in rural
areas. Hence it is obvious that the goal of tourism policy is both to increase the number of visitors
and their spending and to redistribute income from cities to rural villages. However, it should be
noted that in the late 1980s, the Japanese government had already enforced the same policies inorder to promote regional tourism development. The Resort Law was established in 1987, when the
bubble economy had just begun, and huge investment was poured into the region to build hardcore
tourism facilities like golf courses and leisure conventions.
These resort development plans, however, have totally misled the socio-economy with regard tosustainable development. This is partly because the bubble economy collapsed at the beginning of
the 1990s and most of these plans have failed due to insufficient funding, but mainly because thetourism-oriented development plans have been centrally planned irrespective of the each region’s
particularity. There is only one policy package of tourism development for various regions in Japan.
It is also true that there were a few regions, like Yufuin or Ajimu in Oita prefecture, where local
social planners advocated typical procedures to develop the local socio-economy with tourism.
These are now exemplary regions of ecotourism using sustainable socio-economic development.

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Their common features are financing by local banks, planning by local people, and concern forimproving the welfare of residents, in addition to strong leadership in the management of CPRs. Allof them have led to a kind of self-enforcing process of tourism development that is less influenced
by the resort development plans mentioned above.
We don’t think that centrally planned or government-led tourism policies necessarily led to poor
development for the local areas. However, it can be easily shown that locally decentralized plans fortourism-oriented development like those in Yufuin or Ajimu should be of, by and for the people
living in the community. Accordingly, since the CPRs are unexpendable resources vital to tourism
development, the management of CPRs in the community must be given priority in order to keepsocio-economic development sustainable. In this regard, it should also be noted that the Japanese
government seems to be changing its policy slightly towards ecotourism. In fact, the Green Tourism
Law was established in 1994 by the Ministry of Agriculture, Forestry and Fisheries in order topromote self-motivated tourism plans in the rural towns and villages. After the world-wide
movement towards ecotourism development led by United Nations, and the International Year of
Ecotourism in 2002, the Ecotourism Promotion Law was passed in 2008. This is the first law inJapan to give a clear role to ecotourism in preserving natural and cultural resources and to the crucial
concerns of the community with regard to tourism development. Although it has just begun, there aresome specific steps to the process that should be followed: First, a community council consisting ofmany stakeholders, such as promoters, non profit organizations (NPOs), professionals, landlords aswell as local governments must be established. Second, the community council makes the
ecotourism plans and is able to place restrictions on development activities to preserve the naturalenvironment. As far as Japan is concerned, ecotourism seems to be desirable means of promoting
tourism development along with environmental preservation and harmonious socio-economic
progress1.

2.2 Common Pool Approach and Ecotourism
The implication of tourism policy development for ecotourism is very clear. As shown in thecore of the Ecotourism Promotion Law, it is the local people or the community that should plan and1

Sustainability, environmental preservation or regional developments are the key concepts for analyzing tourism
development. See, for example, Tisdell and Wen (1997), Li (2004), Lim and Mcaleer (2005) and Tsaur, Lin and Lin(2006).

5

promote the management of tourism resources. Hence it is very natural to introduce the Common
Pool Approach to the management of tourism resources (CPRs approach, in short) as a major means
to ecotourism development. Ostrom (1990) and Ostrom et al. (1994) have given the foundation of
CPRs approach. In the late 1990s, the close relationship between CPRs management and ecotourism
development was investigated by Steins & Edwards (1999), Bosselman, Peterson & McCarthy(1999) and Briassoulis (2002), who have emphasized the need for a CPRs approach to promoting
ecotourism.
The basic idea of the CPRs approach is that regional development can be attained by using
CPRs like the natural environment and local cultural landmarks, which are typically characterized bytheir non-excludability and rivalry. For example, everybody in a region can approach and use thebeautiful forest (non-excludability), but one person’s use of it may be interrupted by another’s(rivalry). People also tend to overexploit CPRs so as to lead to inefficient outcomes. Thisphenomenon is called ‘the externality of CPRs’ because someone’s welfare can be negatively
affected by another’s use of CPRs. It has been shown that to tackle this issue, the following measures
should be enforced: The first is to employ an adequate system of incentives, including user charge
or subsidies, and the second is to introduce management systems. It should be noted that neither
system can function well without suitable management of CPRs supported by people’s participationand the cooperation of the community. Accordingly, in order to avoid the externality of CPRs and topromote the development of tourism in the region, it is necessary for the community to build asystem for proper management of CPRs and to make adequate plans toward sustainable tourism
development2. Establishing the boundary rules or the allocation rules of use of CPRs will lead totheir sustainable use. As far as the boundary rule is concerned, for example, people should restrict
the area which the stakeholders are allowed to access.
As mentioned above, the CPRs approach emphasizes the community’s involvement, or
community-based management of CPRs. However, because of the depopulation or decline of therural socio-economy, it is becoming more difficult for the community to exercise proper2

Budowski (1976) has analyzed a contradictory relationship between tourism development and environmental
preservation and has proven that there are three stages of the relationship, namely conflict, co-existence andsymbiosis. More recently, Johanson and Diamanntis (2004), for example, have introduced some successful cases inThailand and Kenya, where tourism has developed with cooperative behavior and eco-management. Fennel (2003)
has good examples of this. Though they have never taken a CPRs approach, it should be noted that they have allmentioned the important role of community cooperation in tourism development.

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management of CPRs. Both industrialization and urbanization have proven to increase an economic
gap between cities and rural areas. Some people in rural areas are suburban commuters who havelittle interest in community activities to preserve CPRs. Moreover, as far as tourism development isconcerned, investment from outside the community sometimes leads to poor management of CPRs
because of the lack of community consciousness on the part of the investors. To promote
community-based management of CPRs and tourism development, voluntary but routine
participation and practices by all stakeholders in the region should be promoted.

3. The Model
3.1 Equilibrium in the Short Run
First, we shall focus our analysis on short-run equilibrium, where the stock of CPRs can betreated as a given. Using the CPRs approach, we should focus on rural areas where CPRs are used todevelop tourism but managed by only a part of the community. To model eco-industry, such as
ecotourism, from a CPRs approach, assume that there are two kinds of people, farmers andnon-farmers. The fixed number of the total population is n and the number of farmers is n . Hence,
the number of non-farmers is n - n . Assume that the major industry in the rural area is CPR-related
in the sense that it is closely related to CPRs management. Agriculture, forestry or tourism are
CPR-related industries. From now on, we shall focus on tourism services as a typical example of
CPR-related industries. Then the production function is given by(1) y = f ( n, R ), f n > 0, f nn < 0, f R > 0, f RR < 0, f Rn = f nR > 0
where R implies the production factor that CPRs deliver. For example, it is easy to imagine that theforest is CPR, but R contains many kinds of CPR-originated products like timber, nuts andatmosphere, places for recreation and even specific landscapes. We shall introduce a typical form of(1) with a Cobb-Douglas type function,(2) y = na R b , 1 > a , b > 0 .
As for the production function, we assume diminishing returns to the scale, so that a + b < 1 . The
profit is given by(3) p = py - wn - rR
where w is the wage level, r is the user charge on CPRs and p is the price of products. Here, w isassumed to be a competitive level. This is because workers in the rural area must be employed until

7

wages reach a competitive or reserved level. As for employment, the first-order condition of profit
maximization is given by
1/ b

æ wö
¶y
w
= ana -1R b =Þ R = çç ÷÷ a -1/ b n (1-a ) / b .
(4)
¶n
p
è pø
Equation (4) means the equality between the marginal product of labour and the real wage.
As far as the use of R is concerned, we have two polar cases;
(5-1)

b -1
¶p
¶y
r
= pbna R b -1 - r = 0 Û= b na R * = ,p¶R¶R(5-2) p = pn R - rR = 0 Û
a

b

b -1
r
y
= na R C = ,pR

where R* is efficient because the marginal product is equal to the marginal cost. However, RC is notefficient. Equation (5-2) shows that the average income must be equal to the marginal cost in theequilibrium, meaning zero profit. If the average income is greater than the marginal cost, increasing
the production level can yield an additional positive profit. Hence the maximum use of R tends to be
RC where R < R . This shows a typical case of overuse of CPRs. To avoid the externality, the*Ccommunity should control the use of resources towards R*. As for the controllability of thecommunity on CPRs, we shall introduce an index q to show the effectiveness of CPR management.
Then the controlled level of resource use will be
1 /(1- b )(6) R = qR + (1 - q ) R = [qb*C

1 /(1- b )æ pö+ (1 - q )] ç ÷èrøna /(1-b ) .

In (6), if there is no control by the community, then q = 0 and R = RC. The complete control toefficient use of CPRs can be attained when q =1 and R = R*. Hence it is natural to interpret themeaning of q as the index of the community’s cooperativeness in maintaining the regional
resources. Then we shall define this as(7)

C º qb 1/(1- b ) + (1 - q ) = C (q ), C ' < 0, C (1) = b 1/(1-b ) £ C £ C (0) = 1 .

Taking (4), (6) and (7) into consideration, we haveb(8) n = [C (q )b (1- b )

æ 1 ö æa öpç ÷ ç ÷è r ø è wø

Substituting (8) to (6) leads to(1- b )

]1/(1-a -b ) .

8(9) R = [C (q )(1-a )(1- b )

æ1ö
pç ÷
èrø

(1-a )aæ a ö 1/(1-a -b )
.
ç ÷ ]
è wø

Similarly together (3), (8) and (9) lead tob(10) y = [C (q )b (1- b )a

æ 1ö æa ö
p (a + b ) ç ÷ ç ÷ ]1/(1-a -b ) .
èr ø è wø

Equation (9) is the ordinary supply function with an upwards slope.
In connection with this, we shall assume the demand for the tourism service (d) given by(11) d = d ( p, E ) = m p -g E d , m , g , d > 0, d p < 0, d E > 0 .
In equation (11), E is the stock of CPRs and is assumed to be constant in the short run. As fortourism, the price elasticity γ can be small enough if the region is very famous and has characteristics
with respect to tourism resources, as do the world heritage sites. But, it may be large if there are few
outstanding tourism sites in the region because an increase in price can lead to sharp decline ofvisitors. Hence, the tourism site with small γ has some monopolistic power over pricing, but the
tourism site with large γ doesn’t. If the tourism market is very competitive, then price elasticity will
be indefinite and p becomes a parameter. The demand shift parameter m is assumed to indicate apositive effort on the part of the community to raise tourism. Accordingly, it should be also
recognized that a strong effort and cooperative action by a tourism-related agency in community willlead to tourism development. Therefore it is natural to refer to m as the community’s
cooperativeness index for tourism development.
Equilibrium in the tourism market can be attained by the balance of (10) and (11). Then theequilibrium price in the short run will bea(12) p = [C (q )- b (1- b )æ wör ç ÷ E d (1-a -b ) m (1-a -b ) ]1/ A , A º g (1 - a - b ) + (a + b ) > 0 .
èa øb

By substituting (12) into (8), (9) and (10) respectively, we have the following in logarithmic terms;
(13)

æwö
A log n = b (1 - b )(g - 1) log C (q ) + b (1 - g ) log r + (g ( b - 1) - b ) log ç ÷ + d log E + log m
èa ø

(14)

æwö
A log R = (g (1 - a ) + a ){log C (q ) - log r } + a (1 - g ) log ç ÷ + d log E + log m
èa ø

(15)

æ wö
A log y = (g (1 - ab ) + ab ) log C (q ) - bg log r - ag log ç ÷ + (a + b )(d log E + log m ) .
èa ø

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From (13)-(15), the effects of change in various parameters on employment, resource use andproduction can be summarized in Table 1.

Table 1 Effects of parameters in the short run
θ
n
R
y

r >1
－
－
－

r
1>r >0
＋
－
－

r >1
－
－
－

w
1>r >0
＋
－
－

r >1
－
－
－

E
1>r >0
－
＋
－

＋
＋
＋

Some notable points should be mentioned in table 1. First, resource use can be managed wellthrough the cooperative behaviour of the community. However, the cooperative management of
CPRs can lead to less employment and production because it implies restricting resource use in theregion. Hence, with resource preservation it is generally difficult to pursue compatible proceduresthat increase both income and employment. Second, we have an exception in the model case where
the price elasticity is less than unity. Then the more cooperative the community is, the more
employment there will be. This is because low price elasticity means the tourism site is famous andthe tourism market can be efficient in the sense that cooperative management also leads to lessresource use. Third, as for the user charge for CPRs, the same effects as the cooperativeness ofcommunity can be observed. An increase in user charges leads to a decrease in employment or
production but less resource use. However, as far as famous tourism sites with low price elasticity
are concerned, an increase in user charges will entail an increase in employment. Lastly, as for thestock level of CPRs, those CPRs that are abundant in natural environmental features as well as
cultural atmosphere can lead to an increase in employment and production, and can also afford toprovide more resource use.

3.2 Sustainability of Tourism Development
All tourism activities deplete an aspect of tourism resources, such as the natural environmentor the cultural heritage. The major part of the depletion comes from resource use. Accordingly, it isvery likely that these resources will be exhausted if there is no appropriate process for making themsustainable. Using a concept of weak sustainability, it is assumed that a part of the depletion of CPRs

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can be renewed by investment. The proper maintenance of a cultural heritage, for example, can bedone at a cost to the community. Even natural resources like forests or riverside landscapes can bepreserved through human costs such as rule building, monitoring and planning in the community.
Hence we shall assume(16)

dE / dt = E = H ( E , q ) - rE - kR, r > 0, k > 1

where t is the time, ρ is the depletion rate and H is the rebirth function of CPRs with H E > 0 and

H q > 0 . The sustainability of the community must imply the stability condition of (16), that is¶E / ¶E = H E - r < 0 . This is required for the community because if it is not the case, the stock of
CPRs could diverge from equilibrium and become exhausted in the long run. In (16), the financial or
human burden for preserving CPRs is assumed to be related to the cooperative activities of thecommunity. Moreover, the effect of congestion on CPRs that occurs in typical tourism sites can beindicated by κ. The greater the congestion, the more the community must increase the CPR’s use toprovide a sufficient tourism service. This will lead to a decrease in the stock of CPRs. A lack ofcooperative activity and congestion in the CPRs can lead to a serious decline of the renewability of
the CPRs. Hence a community with well-managed and completely preserved CPRs may have(17) R = [ H ( E , q ) - rE ] / k º R ( E , q , r , k ), R q > 0, R r < 0, R k < 0 ,
S

S

S

S

S

where RS means the sustainable use of CPRs and R S E < 0 from the stability condition of (16). Thisshows the conditions for sustainable use of CPRs. Among the equations (13), (14), (15) and (17) for
four variables, n R, y and E, we can have the reduced model of (14) and (17) only for R and E. Easy
manipulation would be possible if equation (17) can be expressed in a linear formula such as(18)

log R S = -e 1 log E + e 2 log q - e 3 log r - e 4 log kwhere each coefficient is positive and implies elasticity with respect to each of the variables. Figure
1 shows (14) sloping upward and (18) sloping downward.
Because the cooperativeness of the community varies from place to place, there can be a wide
range in equilibrium. If the community has a strong commitment to the maintenance of CPRs andthe use of CPRs can be managed cooperatively, then the sustainable use of CPRs and the equilibrium
stock of CPRs will be (logR*, logE*). However, if there is little cooperative action by the people, itis easy to see that CPRs and their use may be small, leading to less employment and production in
the region.

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Figure 1 Sustainable management of CPRslog R,logRS(18) q ® 0(14) q ® 0(14) q ® 1

logRC
logR*

(18) q ® 1
O

logEC

logE*

log E

Generally ecotourism is defined as tourism development with environmental preservation anda sound economy in the region. Although the concept of ecotourism includes many features, such as
education, experience and an understanding of regional resources, the participation of the local
people in management of tourism resources, the direct benefits to local people by tourism and theconservation and management of tourism resources seem to be common criteria by which
ecotourism can be gauged. In the equilibrium at (logR*, logE*), (i) the sustainability of regional
development, (ii) the maximization of profit, and (iii) market clearing are attained. As for the actual
management of CPRs where q is positive but less than 1, the equilibrium will be between (logRC,
logEC) and (logR*, logE*). Moreover it reflects the cooperative method of decision making in thecommunity for managing resource use. Accordingly, tourism development that occurs in equilibriumat (logR*, logE*) can be justified as the ‘perfect’ ecotourism.
Here we shall mention the community’s social welfare function (SWF). The tourism sector in
the region receives profit π in equation (3) but the total income or welfare of the community, W mustbe given by(19)

W º p + wn + rR = p y .

Hence, we have the alternative of (19) in the logarithm formula,12(20) A log W = b (1 - b )(g - 1) log C (q ) + b (1 - g ) log r + a (1 - g ) log æç w ö÷ + d log E + log m .3
èa ø
A statistical view of equation (20) implies that the welfare or income of the community stemmingfrom CPRs-related industries can be decomposed into factor prices, regional natural resources andcontrollability of the use of CPRs. Equation (20) has important implications in that there are two
ways that the community’s welfare can be affected by cooperative activities. One is a direct effectthrough the control of the use of CPRs. This effect is positive if and only if the tourism site has
sufficiently small demand elasticity. As already mentioned, a tourist site tends to have small demand
elasticity when it is famous and monopolistic. In this case, an increase in wages or user charges of
CPRs can also increase welfare. Although control of the use of CPRs always puts restrictions on
production, the small demand elasticity can increase total revenue from tourism via price increases.
However, if the demand elasticity is greater than one, the control of the use of CPRs leads to lessproduction and less welfare. The other way that the community’s welfare can be affected is anindirect effect through an increase or improvement of CPRs. An increase in cooperativeness of thecommunity will increase CPRs. Then, as shown in Figure 1, both a rightward shift of sustainableconditions by (18) and a downward shift of resource use by (14) occurs, and this leads CPRs to
increase towards E*, enhancing the attractiveness of the region for tourism. This is the reason why anindirect effect of more cooperative actions can increase the welfare of the community. As far as thetotal effect of cooperativeness in the community is concerned, it is notable that tourist sites withlarge demand elasticity would not succeed in increasing welfare through cooperative action tocontrol CPRs. Accordingly, there is some possibility of widening divergences among regions
through tourism development policy. It should be also noted that it is important for regions to havestrategies for developing ecotourism, because even if they are not perfect, they not only enrichtourism resources as CPRs but also increase their marketability as tourist sites. In the model
framework, these effects can be explained as an increase of d or m in equation (20).
These considerations may provide some critical points. First, the cooperation of thecommunity does not always lead to an increase in welfare. Hence it is necessary for the community
to build up a cooperative system for managing tourism. In particular, it must be a region with high3

SWF should include any other factors by which people in the community derive some feelings of happiness. This
happiness might come from daily life in the rural atmosphere. Therefore such sources of happiness are hard to define.
We shall mention only income-based happiness.

13

demand elasticity that needs more active marketing for tourism development. Second, themanagement of CPRs usually entails a contradictory control of resource use, and this will lead to a
trade-off between sustainable resource management and economic growth. Third, as far as themarket is concerned, it is important for the region to develop tourism marketing by improving its
brand-image so that demand elasticity decreases. Accordingly, tourism development should bedirected toward rediscovering and revaluing tourism resources in the region. In this sense,‘ecotourism’ must be sustainable tourism development enforced persistently through continuous
endeavours on the part of the community in managing CPRs.

4. Empirical Analysis of the Rural Community in Japan
4.1 An Overview of Agriculture in Japan
After World War II, the Japanese economy developed at a high growth rate promoted by the
rapid industrialization of heavy industries like steel, shipbuilding and machinery. Since the 1970s,
the industrial structure has developed toward higher value-added manufacturing such as electronic
devices, automobiles and precision machinery, but the tendency toward non-agricultural production
has not changed (see Figure 2). Moreover, farm households have received income not from farm butfrom non-farm subsidiary works (see Table 2). It is also notable that rapidly aging of the farming
population and the decline in the attractiveness of farming have diminished incentives to cultivate
land (see Table 3).
Figure 2 Cultivated Land under Management in Japan

Millions ha

Millions

7

7

6

6

5

5

4

4

3

3

2

2

1

1

Puddy
U pland Field00
19 50 1955 1960 1965 1970 19 75 19 80 19 85 19 90 1995 2000 2005

Perenial Tree Land
Farm H ousehold

14

Table 2 Farm household engaged in farming

1990
1995
2000
2005

total
2970527100.0%
2651403100.0%
2336909100.0%
1963424100.0%

major
82037727.6%67753125.6%50048421.4%42946721.9%

sub-major subsidiary954339119581132.1%
40.3%
694564
127930826.2%
48.3%
599449123697625.7%
52.9%
4433891090568
22.6%
55.5%

Table 3 Abandoned farm land

Year
1975
1980
1985
1990
1995
2000
2005

Households

Area (ha)446036427655398257689441632768845418

99104
91746
92671
150655161771
210019828883385791

Source (Figure 2 & Table 2,3): Census of Agriculture and Forestry in Japan of each year.

A community in rural areas is basically supported by the rural structure of the population,
production and employment and cooperative works in the community consist of community-based
activities to sustain the community’s resources or the socio-economy itself. Hence it is likely that the
decline of primary industries has caused a drastic change and in some cases a sharp collapse of thecommunity.

4.2 Cooperative Structure of Rural Communities in JapanThe 2005 census of agriculture and forestry in Japan4 provides useful data related to thecommunity structure of Japanese rural areas. Before discussing the empirical analysis, we shall
explain the statistics framework of the census and give an overview of rural communities in Japan.
The census has three parts: first, the inquiry into the management of agriculture and forestry (Vol.
2–Vol. 6); second, the rural district area survey, including farms and mountain villages (Vol.7); andthird, the sample research on the communities (Vol. 7 and 8)5. Basically all but the last are censuses
including all cities, towns and villages. As far as community-based research is concerned, 23,194 outof 110,897 communities are sampled and have some community functions with periodic meetings.
As mentioned in the model part, our attention should be focused not only on the cooperative
structure of the community but also on the relationship between cooperative actions in the4

The census of agriculture and forestry in Japan is designed and provided by the Ministry of Agriculture, Forestry
and Fishery. This was only the census for the agricultural sector after the World Census was designated by the former
FAO. Although agriculture and forestry were separately reported at first, since 1960 these two sectors have beenreported jointly. See, http://www.maff.go.jp/census/2005/index.html.
5 Vol. 1 of the census is the recapitulation and Vol. 8 includes both agricultural and forestry industries management
and rural district area survey results arranged according to specification by legislation.

15

community and the actual development of an environmental and tourism-oriented society. Before
doing an empirical examination of the community structure, we shall summarize some notablefeatures of Japanese communities in the statistics base.

Figure 3 Interchange and distances
25.00%
20.00%
15.00%

by tourism
by drop-shipping

10.00%by school learningby volunteer work

5.00%
0.00%
-15 min.

15-30 min.

30-60 min.

60-90 min.

90- min.

In Vol. 7 of the census, the rural district area study reports the use of local resources andinterchange among regions, mainly between cities and rural areas. From the perspective of distance,
it is notable that the interchange activities by tourism or by school learning tend to be more active inrural areas located at a greater distance from a densely inhabited district (DID). In rural areas that are
more than 90 minutes from a DID, about 16% of the farm clusters are engaged in interchange
activities by tourism, 6 percent-points higher than average. It also reports the relationship between aninterchange activity in the rural areas and distance from DID. Four categories of community work
are shown in Table 4 below: ‘direct sales of farm products’, ‘tourism’, ‘schooling’ and ‘volunteer
work’. The level of volunteer work for farming is very low; only around 1% of farm clusters areengaged in it. As far as the actual number of farm clusters that eliminate overlap of each count isconcerned, about 30% of farm clusters are engaged in at least one of four activities in Japan.
However, these activities are not enforced under the community-level agreement. Only about 1% of
the total farm clusters are engaged in these activities through agreements (see the right-hand row
entitled ‘percentage’ in Table 4).
The rural district area study also reports the situation with regard to the utilization of facilities
related to local resources, such as cash crops, a rental farm, parks for various forms of recreation andwork-study farms or forestry. There are 15,603 farm clusters that have at least one kind of facility in16Japan, but 123,862 farm clusters do not. As for each facility, 230 million visitors come to a directly
managed shop by farm located in rural areas and 135 million to forest-related facilities (E) to (I)designated below in the legend. Many visitors tend to visit places located nearer to DID but (I),including ski areas, bird-watching, field athletics and orienteering areas, etc. Figure 5 (a) and (b)shows the per-cluster and per-facility based number of visitors to each facility. It may be noteworthy
that a large number of people, (around 54, 000) tend to visit a recreational facility of forest.

Table 4 Activities for interchange of farm-clusters

by tourism
Anyintercourse
asof farm- active community Inactive
clusterwork
Total-15 min.
15-30 min.
30-60 min.
60-90 min.
90- min.

by school learningby volunteer workasactive community Inactive
work

asactive community Inactive
workNointercourse
asactive community Inactive of farmclusterwork

42 06313 443

1 659

126 02227 455

2 412

112 01013 4241 084

126 041

1 726

258

137 739

97 40213 19114 36911 453
2 259
791

3 255
4 235
4 582
1 046
325

321
553
610
128
47

47 52842 09829 193
5 489
1 714

8 757
9 866
7 215
1 239
378

786
837
602
118
69

42 02636 46726 560
5 296
1 661

4 511
4 343
3 594
631
345

319
258
305
64
138

46 27241 99030 181
5 904
1 694

668
472
472
89
25

50
78
102
24
4

50 11545 86133 3036 446
2 014

37 59231 96422 322
4 276
1 248

9.64%

1.19%

90.36%

19.69%

1.73%

80.31%

9.63%

0.78%

90.37%

1.24%

0.18%

98.76%

31.36%

6.41%

0.63%

93.59%

17.24%

1.55%

82.76%

8.88%

0.63%

91.12%

1.32%

0.10%

98.68%

38.59%

34.16%
27.23%

9.14%
13.57%

1.19%
1.81%

90.86%
86.43%

21.29%
21.36%

1.81%
1.78%

78.71%
78.64%

9.37%
10.64%

0.56%
0.90%

90.63%
89.36%

1.02%
1.40%

0.17%
0.30%

98.98%
98.60%

32.82%
22.92%

5.37%

16.01%

1.96%

83.99%

18.96%

1.81%

81.04%

9.66%

0.98%

90.34%

1.36%

0.37%

98.64%

4.39%

1.88%

15.94%

2.31%

84.06%

18.54%

3.38%

81.46%

16.92%

6.77%

83.08%

1.23%

0.20%

98.77%

1.28%

percentage-15 min.
15-30 min.
30-60 min.
60-90 min.
90- min.

by drop-shipping

Figure 4 Visitors and Distances from DID (1000’s)

12000010000080000-15 min.

60000

15-30 min.
30-60 min.

40000

60-90 min.

20000

90- min.

(I)

(H)

(F)

(G)

(D)

(E)

(C)

(A)

(B)

0

(A) local direct shop(B) civil farm(C） interpretive center for agriculture（D) farm garden（E) interpretive center for forestry（F) work-study forestry（G) forestry park（H) camping（Ｉ） other recreation site in forestry

17

Figure 5(a) Visitors per farm cluster

Figure 5(b) Visitors per facility

100 000

80 00090 00070 00080 00060 00090- min.

(I)

(H)

(F)

(G)

(E)

(D)

(C)

(B)

(A)

10 00060-90 min.

20 00090- min.

10 000(I)

20 00030-60 min.

30 000(H)

60-90 min.

(F)

30-60 min.

30 000(G)

40 00015-30 min.

40 000(E)

50 000-15 min.

50 000(D)

15-30 min.

(B)

60 000(C)-15 min.

(A)

70 000The community-based research in Vol. 7 of the census includes more detailed information
about the cooperation and activity of the community.
As shown in Table 5, there are six subjects about which meetings for various community
works are held. Several points should be noted. With regard to the festival, it can be found that theparticipation rate is very high, around 80%, and older residents tend to participate more in mid andintermontane areas. This is also true in cases of the ‘welfare of seniors’, ‘preservation of thelandscape’ and ‘protection of nature’. These activities are mainly supported by older rather than
younger residents. Females play an important role in the welfare of the community and tend to
discuss this issue more frequently than males. However, as for the preservation of traditional culture,
the participation rate of the young is relatively high. It is easy to show that participation in meetings
for festivals, culture and events is decreasing, but participation in areas concerning the welfare ofseniors, preservation of the landscape and the protection of nature is increasing. Hence it is likelythat a community tends to be more cooperative not only with regard to the welfare of the aged but inthe area of environmental preservation. In particular, in the mid and intermontane areas,
environment-related cooperation in a community must be more active. As mentioned above,
however, mainly older residents support these activities. Aging has occurred drastically in the rural
areas of Japan and this means that we need cooperative activity by the young as well as by theoutsiders of the community. Accordingly, cooperation among communities is also the key to such an
aging society, and the interchange of personnel between city and rural areas, for example, is an
important factor.

18

5 .A model estimates
Because the aim of our research is to find out how important the cooperative action of thecommunity is for regional development, our interest should first of all be focused on cooperative
behaviour and its outcome. As indicated by equation (20), which shows how CPRs and cooperative
action for CPRs are important, our empirical research must include an estimate of cooperativeness in
the region. Secondly, as equation (20) also implies, we shall investigate some economic variables
related to production that determine the level of regional welfare or income.

5.1 Cooperativeness of community activities
As already mentioned, sample research on rural communities from the 2005 Census of
Agriculture and Forestry in Japan can be useful to estimate the cooperativeness of the ruralcommunity. Among the data, that which concerns both ‘the participation rate of community
activities’ and ‘community-based meetings’ are of importance. Both are prefectural-based data as
shown in Table 6, and we can employ some statistical procedures that show some characteristics ofthe structure of cooperativeness in the region.
The participation rate of community activity is defined as the ratio of communities where ameeting for each activity is held to the total number of communities. They can be classified into two
categories: one consists of meetings for activities of farm production, farm roads and water
management, and management of commons; and the other consists of meetings for non-farmactivities, including management of facilities for daily-life, community events and environmental
preservation. For example, in the first cell of Table 6, we can see that meetings for farm production
are held in 78% of the communities in Hokkaido. On the other hand, community-based meetings
include festival or event-oriented meetings, cultural and environmental preservation, and welfare forseniors. The figures for the community-based meetings in Table 6 also indicate the same
participation rate as the community activities. Hence it is notable that meetings for festival are heldin 72% of the communities in Hokkaido but these for preservation of landscapes are held only in
56% of the communities in Hokkaido6.

6

As for community-based meetings, we have made some revisions to the original data to incorporate the frequencyof the meetings and to eliminate participation of the outsiders. By using data on the frequency of meetings per year
and the rate of participation of outsiders, we get the data shown in Table 6. However, it is notable that this technicalamendment does not lead to substantial difference.

TotalUrban area
Festival
flat area
mid areaintermontane area
Total
Preservation of Urban area
traditional
flat area
mid area
cultureintermontane area
Total
Urban area
Eventsflat area
mid areaintermontane area
Total
Urban
area
Welfare forflat area
senior
mid areaintermontane area
Total
Urban
area
Preservation offlat area
landscapemid areaintermontane area
Total
Protection of
Urban area
nature, animals
flat area
mid areaand plantsintermontane area

Purpose of
meeting

86420
15790
25130
28960
16530
32150
5690
9340
11020
6110
54540
10140
15910
18960
9530
38690
6990
11780
13370
6550
64450
10070
18610
22880
12880
7390
1140
1880
2690
1680

77.9% △ 1860
77.0% △ 230
77.9% △ 810
76.8% △ 500
81.0% △ 320
29.0% △ 1820
27.8% △ 230
28.9% △ 500
29.2% △ 610
29.9% △ 47049.2% △ 1240
49.4% △ 290
49.3% △ 270
50.3% △ 460
46.7% △ 240
34.9% 3460
34.1%
560
36.5% 1350
35.5% 1050
32.1%
500
58.1% 4380
49.1%
480
57.7% 1050
60.7% 1900
63.1%
940
6.7%
960
5.6%
140
5.8%
240
7.1%
410
8.2%
170

changecommunit
particip between
Farming area y with any
ant rate 1995meeting
2005
8580
1670
3040
2770
1100
6510
1150
2160
2100
1110
5320
820
1850
1850
800
610
150
230
170
60
1980
300
770
590
320
490
90
140
200
70

9.9%
10.6%
12.1%
9.6%
6.7%
20.2%
20.2%
23.1%
19.1%
18.2%
9.8%
8.1%
11.6%
9.8%
8.4%
1.6%
2.1%
2.0%
1.3%
0.9%
3.1%
3.0%
4.1%
2.6%
2.5%
6.6%
7.9%
7.4%
7.4%
4.2%

young
390
90
130
110
70
670
100
210
230
130
1250
300
390
330
230
8680
1350
2440
3140
1750
3280
390
1050
1050
780
130
30
40
40
20

elder

0.5% 11010
0.6% 1780
0.5% 2850
0.4% 3760
0.4% 2610
2.1% 4320
1.8% 820
2.2% 1310
2.1% 1370
2.1% 820
2.3% 4140
3.0% 820
2.5% 1030
1.7% 1390
2.4% 890
22.4% 11360
19.3% 2090
20.7% 3740
23.5% 3780
26.7% 1740
5.1% 11210
3.9% 1720
5.6% 3270
4.6% 3820
6.1% 2400
1.8% 1310
2.6% 200
2.1% 400
1.5% 460
1.2% 250

female
12.7%
11.3%
11.3%
13.0%
15.8%
13.4%
14.4%
14.0%
12.4%
13.4%
7.6%
8.1%
6.5%
7.3%
9.3%
29.4%
29.9%
31.7%
28.3%
26.6%
17.4%
17.1%
17.6%
16.7%
18.6%
17.7%
17.5%
21.3%
17.1%
14.9%

other
66450
12260
19100
22330
12760
20650
3620
5660
7320
4040
43820
8200
12630
15390
7600
18040
3410
5370
6270
2990
47990
7660
13530
17430
9370
5450
820
1290
2000
1340

participation
age-class mailly promoting

76.9%
77.6%
76.0%
77.1%
77.2%
64.2%
63.6%
60.6%
66.4%
66.1%
80.3%
80.9%
79.4%
81.2%
79.7%
46.6%
48.8%
45.6%
46.9%
45.6%
74.5%
76.1%
72.7%
76.2%
72.7%
73.7%
71.9%
68.6%
74.3%
79.8%

60960
11260
18420
19540
11740
21370
4080
6700
6910
3690
33860
6720
10570
11340
5220
28140
5500
9140
9140
4370
52870
8360
15560
18410
10540
5280
930
1380
1870
1120

70.5%
71.3%
73.3%
67.5%
71.0%
66.5%
71.7%
71.7%
62.7%
60.4%
62.1%
66.3%
66.4%
59.8%
54.8%
72.7%
78.7%
77.6%
68.4%
66.7%
82.0%
83.0%
83.6%
80.5%
81.8%
71.4%
81.6%
73.4%
69.5%
66.7%

25460
4540
6700
9430
4790
10780
1620
2640
4110
2420
20690
3410
5340
7630
4310
10550
1500
2640
4230
2190
11590
1710
3050
4480
2350
2100
210
500
830
570

29.5%
28.8%
26.7%
32.6%
29.0%
33.5%
28.5%
28.3%
37.3%
39.6%
37.9%
33.6%
33.6%
40.2%
45.2%
27.3%
21.5%
22.4%
31.6%
33.4%
18.0%
17.0%
16.4%
19.6%
18.2%
28.4%
18.4%
26.6%
30.9%
33.9%

withinincludes outsidecommunity only

regionfrequency

670
140
160
300
70
1640
300
390
660
310
1150
200
270
490
200
5570
970
1710
1880
1020
3640
840
1080
1070
650
340
70
90
90
90

0.8%
0.9%
0.6%
1.0%
0.4%
5.1%
5.3%
4.2%
6.0%
5.1%
2.1%
2.0%
1.7%
2.6%
2.1%
14.4%
13.9%
14.5%
14.1%
15.6%
5.6%
8.3%
5.8%
4.7%
5.0%
4.6%
6.1%
4.8%
3.3%
5.4%

25000
4010
7430
8240
5330
7950
1340
2410
2720
1480
13750
2550
3940
5100
2170
11680
2290
3660
3870
1860
28870
4440
8700
10410
5310
2950
460
810
1020
660

28.9%
25.4%
29.6%
28.5%
32.2%
24.7%
23.6%
25.8%
24.7%
24.2%
25.2%
25.1%
24.8%
26.9%
22.8%
30.2%
32.8%
31.1%
28.9%
28.4%
44.8%
44.1%
46.7%
45.5%
41.2%
39.9%
40.4%
43.1%
37.9%
39.3%

60750
11650
17550
20430
11130
22560
4050
6540
7650
4320
39630
7390
11710
13380
7150
21440
3740
6420
7620
3660
31930
4790
8830
11410
6910
4100
620
970
1580
930

70.3%
73.8%
69.8%
70.5%
67.3%
70.2%
71.2%
70.0%
69.4%
70.7%
72.7%
72.9%
73.6%
70.6%
75.0%
55.4%
53.5%
54.5%
57.0%
55.9%
49.5%
47.6%
47.4%
49.9%
53.6%
55.5%
54.4%
51.6%
58.7%
55.4%

once or more per once or more per once or more permonth
6 months
year

Table 5 Community, Cooperation and Meeting by area, by age, by frequency

19

20

Because meetings about the welfare of seniors in the local community depend on national aswell as local policies, they cannot be only the result of voluntary or autonomous activity by thecommunity. Hence we attain four major series of data concerning community-based cooperative
activities except for senior welfare: activities for farm production, non-farm activities, festival andevent-oriented activities and activities for cultural and environmental preservation. They arecomposed by ordinal procedure of the principal component analysis as shown in Table 6.

Table 6 Cooperative activities in the community and the cooperativeness index

21

The column to the extreme right in table 6 shows the over-all cooperativeness ofcommunity-based activity derived from the four principle components mentioned above. To look atthese indices from a heuristic viewpoint, we shall apply a cluster analysis and give an outcome asshown in Figure 6. This procedure leads us to a clear understanding of the classification ofprefectures. This is shown in Table 7.

Figure 6 cooperativeness index of the community

Table 7 Classification of prefectures by community cooperativeness
Cluster
1

2

3

4

5

prefecturfes
Gifu,Nagasaki,Miyazaki,Gunma
Aichi,Oita,Ehime,Iwate,Aomori,Kagoshima,Niigata,Nara,Kyoto
Shimane,Hiroshima,Hokkaido,
Wakayama,Miyagi,Fukushima,
Akita,Yamanashi
Yamaguchi,Kagawa,Okayama,
Tochigi,Saitama,Ibaragi,
Chiba,Tokushima,Kochi,Tokyo,Osaka
Toyama,Ishikawa,Fukui,Mie,
Fukuoka,Hyogo,Kumamoto,Tottori,Saga,Yamagata
Kanagawa,Shizuoka,Okinawa,
Nagano,Shiga

Culture and Festival andnon-Farming
NatureEvent

Farming

0.14

-0.12

-0.12

-0.01

-0.78

-0.74

0.86

0.29

-0.96

-0.71

-1.35

-1.00

0.49

1.00

0.69

1.08

2.00

1.08

0.52

-0.38

22

As far as the four indices are concerned, the communities in each prefecture can be classified
by some distinguishable feature. In prefectures of cluster No. 5, such as Okinawa, Nagano and Shiga,
communities must be very active to preserve their natural and cultural environments and to holdfestivals and events. Nagano and Shiga especially include a high degree of cooperativeness among
local communities; the factors contributing to such large cooperativeness come mainly from highparticipation in preserving the cultural and natural environment. Communities in prefectures ofcluster No. 3, such as Chiba, Tokyo and Osaka, seem to behave inactively for every cooperative
activity, especially those related to non-farming and farming. In addition, for those in cluster No 4,
such as Toyama, Ishikawa and Mie, community activities for farming and its related works arecooperative. As shown in Figure 6, the community’s cooperativeness varies greatly from region toregion and the factors that lead to those differences are also very diverse.

5.2 Community and the Structure of CooperativenessThe next step is to observe how the cooperativeness of various community–based activities isrelated to their outcome. Here we shall focus our attention on the effect of a community’s
cooperative behaviour on both farming and related outcomes, including tourism, and on theincome-based welfare of the region. We shall prove the former by utilizing the data of the census. As
far as the latter is concerned, we shall incorporate some macro data such as income, capital costs andwages from the prefectural base to estimate equation (20).

5.2.1 Cooperativeness and its outcomes
Meetings and other cooperative activities are performed by communities in order for achieving
certain aims. People in a community usually gather for managing and ensuring that traditional
festivals, for general work and for preserving their environment. Many visitors enjoy traditional
festivals or tourist sites, special landscapes and good harvests from farmland.
We have already proven that there are four principle factors that can be integrated into a
cooperativeness index, as indicated in Table 6. As for the outcomes derived from the cooperative
behaviour, we shall feature some data from the rural district area survey in Vol. 7 of the 2005 census.
The data-tables are ‘situations of the use of local resources’ that include various activities liketourism, drop-shopping, school-learning and volunteer work for interchange between farm-clusters

23

and urban areas and ‘farm-related activities’ that include farmers’ management of processing andproviding farm products and tourism-related management of farms, restaurants and guest houses. We
also employ data concerning eco-friendly activities of farm clusters that can be effective undercooperative circumstances in the community. The summary table of the data is shown in Table 8.
A suitable procedure to look for model specification is covariance structure analysis. We haveapplied this method in order to have a robust estimate and mainly tried two types of model
frameworks; one is the causal relationship model between unobserved variables, and the other is a
type of (Multiple Indicator Multiple Cause) MIMIC model in which an unobserved variable isdetermined by some observed variables and other observed variables are fixed by that unobserved
variable. A sample of the former procedure is given as Figure 7. Although we have tried many
prototypes of the model, it is hard to find a plausible pattern of correlation that indicates therelationship between ‘cooperativeness (cooperation 1 in Figure 7)’ and ‘socio-economic condition(Community in Figure 7)’ of the community. In fact, as shown in Figure 7, they have negative signs
that would contradict both what the theoretical view tells us and what we expected empirically. To
eliminate these contradictory outcomes, we have tried another type of model named the MIMIC
model. A sample result of the MIMIC model is given in Figure 8. We have already had four principal
components, ‘culture and nature’, ‘festival and event’, ‘non-farming’ and ‘farming’, and theirintegrated index that shows the community’s cooperativeness. They can be treated as observed
variables and we can recursively analyze the MIMIC model. A trial-and error method will take us toa final version of the model given as Figure 87.
Some points in Figure 8 are notable. First, an unobserved variable named ‘community’ iscalculated in order to indicate a community’s cooperativeness and this is determined mainly by‘festival & event’ or ‘culture & nature’ factors rather than an ‘overall’ factor. Second, this leads topositive effects on ‘visitors’, ‘farm products’, ‘farm environment’ and ‘per capita income’. Hence, it

7

As for the covariance structural analysis, both cases are regressed by ML estimates. From a technical viewpoint,
many test statistics are reported to have a robustness of estimates. For the MIMIC model, all the estimators are
significant at the 1% level except for ‘Culture & Nature’ to ‘community’ (the probability is 0.42) and ‘community’ to‘tourism’ (0.166). As far as the examples are concerned, we have the following results.
model
A
B

χ2
45.32
57.53

Examination by χ2
d.f.
Prob.
34
0.093
29
0.001

GFI

AGFI

CFI

RMSEA

AIC

BIC

0.803
0.821

0.681
0.661

0.61
0.961

0.085
0.146

87.32
109.53100.52125.88It should be noted that some statistics reported in this table are not as good as the criterion of statistics.
Especially, RMSEA (root mean square error of approximation) is reported to be less than one for a favorable model.

24

is natural to reach the conclusion that daily or routine meetings for various purposes held in thecommunity will create an atmosphere for cooperative actions and will also lead to a community fullof vitality. In such active communities the interchange of products and people between rural andurban areas is developing through tourism or farm-related marketing, leading to the affluence of thecommunity.
Figure 7 Causal relationship model (A)e1Festivale2

culture

e14
.60
.73

e3

eventse5

landscape

.95
.77

total

d1

cooperation1

e15

.46
-.15

.64

.69

e6

Naturee9commons.71

anyfarmact

Community
e17
.49
-.79

visitors
e10.

envProtecting

Figure 8 MIMIC model (B)
e5
e1

.68
.21

e9
.79

Culture&nature.22

Festival&Event

.42
.41

e3
nonFarming
e4

tourism

.16

e2

.48

percapitaIncome

d1

.33

e7

.87

d2

community .41

visitors-.97

e8Overall.90.38

farmproducts
Farming.46

farmenv

e10

.26

25

5.2.2 Cooperativeness and welfare of the community
Our final task is to confirm the relationship between cooperative actions for managing CPRs
and their outcomes for the community. To put it concretely, we shall investigate how
cooperativeness affects the level of welfare in the community given as in equation (20). Before
estimating the model equation, we have to mention the data structure for equation (20). This issummarized in Table 8.

Table 8 Data and sources
Contents

Variables

W (py)

θrw
E

Welfare(nominal prefectural income) : W=Gross prefectural productsof primary sector and service industry
Community’s cooperativenessUser charge of CPRs: r1=investment expenditure of local government /CPRs1, r2=investment expenditure of local government / CPRs2
Competitive wages: w= minimum wage in prefectural baseCommon pool resources( Stock): CPRs1=total land area, CPRs2=total
land area minus inhabitable area

Sources
Social indicators by prefecture 2008,
Statistics Bureau, Ministry of Internal
Affair and Communications
See Table 6.
Social indicators by prefecture 2008,
Statistics Bureau, Ministry of Internal
Affair and Communications
Ministry of Health, Labor and Welfare
Social indicators by prefecture 2008,
Statistics Bureau, Ministry of Internal
Affair and Communications

Note: All variables are of 2005.

Among them, the data that should be defined most carefully are the stock level of CPRs andits cost. However, it may be hard to have exactly the same values as CPRs because the conception of
CPRs is very theoretical and includes many aspects, such as nature, culture etc. For convenience ofactual analysis, it is our assumption that the size of CPRs should mainly correspond to their land-use
for forest and agriculture. Next we have to estimate a user charge for CPRs. Sometimes there is nouser charge paid directly because of non-excludability. Firms can approach and use some CPRs
without paying. A beautiful landscape or clean stream, for example, can be a distinctive feature for a
tourist site. However maintaining them is costly, and this is usually financed through taxes. To havea user-charge for CPRs, we shall assume that investment expenditure by local governments,
including public investment and expenditure against natural calamities, would be a proxy for it.
Because our data is simply based on a cross-section, we shall estimate the model using the ordinary
least square method. Table 9 reports the estimates and the test statistics for the model.

26

All parameters in Table 9 except for cooperativeness are positive and statistically significant.
This means that the welfare of the community can be increased when the wage level, user-charge
and/or use of CPRs grows larger. In equation (20), this is the equivalent of γ being less than one. For
the model analysis, we have assumed that β must be less than one. Accordingly, it is easy to provethat cooperativeness should positively affect the welfare of the community. As far as overall
cooperativeness is concerned, that is the cooperativeness index in Table 6, it is not statisticallysignificant. We have already examined how the relationship between the four factors and theiroutcomes is so complicated in the MIMIC model. A possible explanation may be that a factor like
‘culture & nature’ can have such a positive and huge effect that cooperativeness in the community
affects welfare positively. This is given by model 5 in Table 9.

Table 9 Parameter estimates of the Community model (20)
Dep.Variables(W)Ind.Variables
constant
Overallmodel 1model2
VIF-48.120 ***(2.989)1.1-0.148(-1.324)

Culture&nature
Coopertiveness θFestival&event
Non-Farming
Farmingr1

User-charge r

wages

w

E

VIF

model4VIF

CPRs2

14.907 ** 1.6(2.335)1.912 *** 3.0(6.764)model5
VIF

VIF-52.477 ***(-3.231)-57.860 ***(-3.890)-47.015 ***(-2.770)-48.872 ***(3.117)0.405 *** 2.2(2.752)-0.438 *** 2.7(-2.699)1.8-0.065(-0.492)
1.7-0.089(-0.695)
1.692 *** 4.5(5.144)0.401 *** 2.1(2.838)-0.503 *** 2.2(-3.492)

0.445 *** 2.2(2.979)-0.519 *** 2.6(3.199)1.9-0.018(-0.130)1.7-0.05(-0.380)0.446 *** 2.1(3.142)-0.549 *** 2.1(-3.829)2.001 *** 6.7(6.468)12.460 ** 1.8(1.928)2.046 *** 6.0(7.148)12.892 ** 1.7(2.105)1.805 *** 4.0(5.903)

r1

CPRs1
CPRs

1.496 *** 4.0(4.422)model215.520 ** 1.7(2.502)
1.984 *** 3.0(7.599)16.897 *** 1.6(2.875)2.025 *** 3.0(7.960)1.977 *** 4.8
1.996 *** 4.6(7.384)(7.729)
2
0.615
0.677
0.685
0.661
0.685
R
19.383 ***14.797 ***21.011 ***13.800 ***20.16 ***
F
Note: t -values are given in parentheses. **Significant at 5% level, and ***significant at 1% level. VIF is the variance inflation factor .

27

6. Final Remarks
In this paper, we have studied the relationship between the developments of eco-industries
such as ecotourism and the community structure. From a theoretical perspective, we incorporated theCPRs approach and focused on both the structure of a community’s cooperativeness and its effect onvarious outcomes such as local development of agriculture and tourism. Moreover, empiricalresearch on factors that determine the system and situation of the management of CPRs in Japaneserural areas has been analyzed. By using the data of the 2005 Census of Agriculture and Forestry inJapan, cooperative behaviour in the community related to land use or traditional cultural events andthe structure of community-based participation of the people was investigated.
The major findings of the paper are as follows. In Japanese rural areas, socio-economic factors
have been adversely affected by the decline in the primary sector, its major industry. Accordingly,
the community structure has also changed drastically. It is proven that the factors that determine thecooperativeness of various community activities are complicated; however cooperative activities forfestival and events, or preservation of the cultural and natural environment in the community seem to
be major factors keeping community activity cooperative. It is also proven that a factor like
preservation of the cultural and natural environment can have such a positive effect that thecooperativeness in the community can positively affect the community’s welfare.
Last but not least, from a theoretical viewpoint, it can be easily proven that the effective
management of CPRs to keep the local community sustainable should be dependent on somecooperative activities by residents. However, from the empirical viewpoint, we could not makerobust estimates of the significant relationship between cooperativeness and community welfare.
This is partly because of a lack of adequate data sets and seems mainly due to the poor definitions of‘cooperativeness’ and ‘CPRs’ for empirical research. These are further tasks to be done.

28

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