Where Did Our NIMBY Go?
The Spatial Concentration of Waste Landfill Sites
in JapanYuichi Ishimura
Kenji Takeuchi

May 2018
Discussion Paper No.1818

GRADUATE SCHOOL OF ECONOMICS
KOBE UNIVERSITYROKKO, KOBE, JAPANWhere Did Our NIMBY Go?
The Spatial Concentration of Waste Landfill Sites in Japan

Yuichi Ishimura
Faculty of Management Information, Kyoto College of Economics. Nishikyo-ku, Kyoto, 610-1195, Japan. Lecturer

ishimura0601@yahoo.co.jp

andKenji Takeuchi
Graduate School of Economics, Kobe University. Rokko, Kobe, 657-8501, Japan. Professor.

takeuchi@econ.kobe-u.ac.jp1Abstract
This study investigates the spatial concentration of waste landfill sites over two decades. Using aunique dataset of 2,164 industrial-waste landfill sites from 1992 to 2012, we find a persistent spatialconcentration of sites managed by private companies. The empirical results show that the economic
factors and the existence of other waste-related facilities have a positive effect on the location ofprivate landfill sites. Interestingly, this relationship was fairly stable for 20 years despite a significant
decline in the number of sites in operation. The results suggest the difficulty in addressing NIMBY“not in my backyard” issues without public intervention.

Keywords: Waste landfill site, Industrial waste, Spatial econometrics, NIMBY, JapanJEL Classiﬁcation D72, Q53, R39

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1. Introduction
Determining locations of unwanted facilities often causes disputes. A typical example is a solid
waste landfill site that local communities are reluctant to accept even though they understand theimportance of such facilities for society in general. For every big city, finding a good location for awaste landfill is a challenge. New York City, where available land for waste disposal is in short supply,transports much of its municipal solid waste by truck, train, and barge to landfill sites as far as 600
miles away (Galka, 2016). The situation is also serious in rapidly growing economies whose amountof waste is dramatically increasing. Cities in China are running out of suitable places for landfills andare turning to incinerators, although their constructions also face opposition by and protests from local
residents (The Economist, 2015).
As a country with high population density and scarce land resources, Japan provides an excellent
setting for studying the NIMBY (not in my backyard) issue. In 2012, 2,164 industrial-waste landfill
sites operated in Japan. As is subsequently shown in this paper, only 25% of Japanese municipalities
have locations for these sites. The concentration of landfill sites in one place might worsen NIMBY
issues. For example, Sasao (2004) pointed out that a sense of unfairness at having to treat waste
generated by other communities is a major reason for residents’ opposition to NIMBY facilities. Is
there any place that has a geographical advantage regarding the location of an unwanted facility dealing
with “bads”? What are the determinants of the spatial concentration of landfill sites? Although thenumber of landfill sites in Japan has decreased given a steady increase in recycling, has the spatial
distribution of sites changed over time? To answer these questions, a detailed investigation into landfillsite locations over a long period is needed.
This study aims to investigate the spatial distribution of landfill sites for industrial waste. Using aunique dataset of 2,164 landfill sites from 1992 to 2012 in Japan, we analyze the changes in the spatialconcentrations and factors that affect their locations. The first contribution of this study is to explore
the spatial distribution of landfill sites over time. Because the long-term location data on industrialwaste has landfill sites have been rarely available, as far as the authors are aware, few studies haveexamined the factors that affect the location of waste landfill sites.

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i

We overcome this unavailability by requesting the disclosure of data from all Japanese local

governments that are in charge of site location licensing. As a result, we collected all of location data
on 2,164 private and public industrial-waste landfill sites that operated from 1992 to 2012.ii
The second contribution of this study is to show how market forces work regarding the location of
NIMBY facilities. In general, location as a result of market equilibrium differs from that of politicalequilibrium. Private firms pursue profit maximization or cost minimization when locating their plants
and facilities, whereas governments focus on social welfare or political support from the industrial
sector and the local community. Therefore, differences likely exist between private and public NIMBY
facilities regarding the factors that affect their location. Previous studies have investigated the location
decision for unwanted facilities with a focus on the political equilibrium (e.g., Feinerman et al., 2004;
Aldrich, 2008; and Laurian and Funderburg, 2014). Feinerman et al. (2004) focused on the politicalaspects of the siting process to resolve conflicts with residents. Aldrich (2008) explored therelationship between local civil society and the location of controversial facilities, such as nuclear
power plants, in Japan. He found that the greater the concentration of local civil society, the less likely
it was that state-planned projects would be completed. Laurian and Funderburg (2014) analyzed thedeterminants of the location of public incinerators in France from the viewpoint of environmental
justice. Although these studies were related to public site selection under a political equilibrium, little
empirical research has been done on the location of NIMBY facilities managed by private companies.
This paper also relates to studies on the impact of environmental regulation on the location of apolluting industry. For example, Stafford (2000) examined the impact of environmental regulations on
the location decisions of hazardous-waste management firms. The result indicates that state
enforcement of environmental regulations affects the cost of providing waste management and,
thereby, serves as an important driver for location decisions of waste management firms. In the context
of the EU pig industry location, Mulatu and Wossink (2014) found that highly polluting sectors of theindustry are attracted to jurisdictions with lax environmental regulations. In contrast to these studies,
our study explicitly considers the impact of environmental regulation on the spatial correlations andchanges in the concentration of economic activities that potentially result in negative externalities tolocal communities.
Our empirical results show that a spatial concentration of landfill sites existed in Japan from 1992
to 2012. Economic factors, such as land price, industrial-waste volume, and highway infrastructure,4

play a significant role in the location patterns of landfill sites managed by private companies.
Interestingly, this relationship has been fairly stable for 20 years despite a significant decline in thenumber of operating landfill sites. In contrast, policy and environmental factors were found to play amodest role in the location of private landfill sites. These results suggest that market forces strongly
affect the concentration of landfill sites.
The remainder of this article is organized as follows. The next section describes the background ofindustrial-waste management in Japan. Section 3 explains the method used to estimate spatial
dependence. Section 4 explains the study’s empirical strategy and the model’s specification and data,
and Section 5 provides the results of the analysis on the spatial concentration of landfill sites. Finally,
Section 6 concludes and discusses policy implications.

2. Background
In Japan, all wastes are classified as “industrial waste” or “municipal solid waste,” and separate
regulations are applied under the Waste Management Law of 1970. After considerable separation forrecycling or incineration, industrial waste is generally disposed of in landfill sites managed by private
waste-management companies, whereas municipal solid waste is disposed of in sites managed by local
municipalities.iii Thus, the management of industrial waste is based on market mechanisms.
Under competitive market conditions, waste-management companies consider profit maximization
when making location decisions regarding their sites and do not sufficiently consider inequalities
caused by the geographical concentration of their sites. Therefore, the location of industrial-waste
landfill sites might lead to the uneven distribution of unwanted facilities for a long time. Examining
the cross-sectional 2012 data on Japanese municipalities, Ishimura and Takeuchi (2017) found that aspatial concentration of industrial-waste landfill sites exists in areas with other waste-related facilities.
Previous studies also explored how the NIMBY issue can be alleviated or mitigated (Sasao, 2004; Frey
and Oberholzer-Gee, 1996; Sakai, 2012). For example, Sasao (2004) indicated that the sense of
unfairness at having to treat waste generated by other communities is a major reason for residents’opposition to NIMBY facilities. Therefore, the concentration of landfill sites in one place might
severely worsen the NIMBY issue and make the construction of landfill sites more difficult.

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The Japanese Ministry of Environment (MOE) has taken measures to mitigate strong opposition
from local residents regarding the construction of landfill sites and to maintain sufficient capacity for
waste landfill. Since 1992, the MOE has required companies managing landfill sites to obtain
permission from the prefectural government before commencing construction and closing sites. To
obtain such permission, companies are required to follow environmental assessment procedures, andthe sites should be constructed in accordance with the technical standards for treatment facilities andsite structures. Although prefectural governments are responsible for issuing the permission, they
approve the construction as long as the company’s application fulfills the conditions required by law.
Thus, prefectural governments do not have the authority to limit either the number of industrial landfill
sites or their location within their administrative boundaries.
In 1997, the MOE reinforced regulations for the construction and management of industrial-waste
landfill sites by revising the Waste Management Law. This revision included establishing amaintenance reserve fund, restricting permissions to construct and close landfill sites and developing
standards for facility structures and operations. In addition, since 1998, the Waste Management Law
has required landfill site constructors to investigate the effect of noise, stench, water, and soil pollution
on the living environment. Furthermore, since 1999, the Environmental Impact Assessment Law has
required waste-management companies to submit environmental assessment reports, which include
public opinion on the matter, when applying for prefectural permission to construct a landfill site.
Tightening the regulations might have increased the cost to operate and manage landfill sites and has
led to a decrease in the number of operating landfill sites. In fact, the number of operating landfill sites
has continued to decrease since 1997.
In addition to federal regulations, the local government can also affect the location decision ofwaste facilities. On the basis of U.S. municipal data, Stafford (2000) indicated that the state’s
enforcement of environmental regulations affects the cost of providing waste management and,
thereby, serves as an important driver for location decisions made by hazardous-waste management
firms. Although local governments’ regulation and enforcement are relatively homogeneous, theintroduction of an industrial-waste tax and shipment restrictions by some prefectures might haveaffected the location decision by causing prefectures with stricter regulations to be avoided. After Mie
prefecture first introduced an industrial-waste tax in 2002, another 27 of Japan’s 47 prefectures haveenforced similar industrial-waste taxes, including landfill taxes and incineration taxes. Sasao (2014a)

6indicated that industrial waste taxes in Japan have minimal effects on reducing the amount of waste
for landfill sites. Another local policy instrument is shipment restrictions on industrial waste, which isenforced in 33 prefectures. Sasao (2014b) showed that waste-trade restrictions in the destinationprefecture decrease the inflow of waste to landfill sites in these prefectures. The introduction of anindustrial-waste tax and shipment restrictions can indirectly affect the location of a landfill site bydecreasing the demand for waste landfill services in those areas and shifting the site location to anotherarea.
Stricter regulations on landfill sites might make the market for waste landfills more competitive.
The tightening of environmental regulations increases the cost of operating and managing landfill sites.
In addition, because of the development of recycling used materials, the amount of industrial waste
disposed in landfill sites has decreased by 85% during these two decades. As a result, the number oflandfill sites in operation has been decreasing. At the same time, infrastructure developments have also
impacted landfill site locations. The total length of the highway infrastructure in Japan has increased
by 60% during the last two decades. Highway infrastructure development decreases transport and time
costs and eventually facilitates the transfer of waste to landfill sites with the least expensive disposalfees. In fact, the share of industrial waste transferred to landfill sites in other prefectures has increased
from 7% in 2000 to 23% in 2012.iv These factors together have likely affected the distribution of sites
and have resulted in a higher concentration in areas with lower operation costs and a higher-than-everdemand for waste landfills.

3. Spatial Dependency in Landfill Site Location
In this section, we investigate the spatial concentration of industrial-waste landfill sites. To test forpossible spatial dependency, we estimate Moran’s I statistic (Anselin, 1988, 1995), which is defined
as follows:𝑁

𝑀𝑜𝑟𝑎𝑛′ 𝑠 𝐼 = Σ𝑁 Σ𝑁 𝑤
𝑖=1 𝑗=1𝑖𝑗𝑁Σ𝑁𝑖=1 Σ𝑗=1 𝑤𝑖𝑗 (𝑥𝑖 −𝑥̅ )(𝑥𝑗 −𝑥̅ )2Σ𝑁𝑖=1 (𝑥𝑖 −𝑥̅ ),7where 𝑥𝑖 is the number of industrial-waste landfill sites per resident in municipality i, (𝑥𝑖 − 𝑥̅ ) is
the deviation of attribute 𝑥 for municipality 𝑖, 𝑤𝑖𝑗 is the spatial weight between municipality i and𝑁j, N equals the total number of municipalities, and ∑𝑁
𝑖=1 ∑𝑗=1 𝑤𝑖𝑗 is the aggregate of all spatial weights.

The details of the location data on industrial-waste landfill sites are described in Section 4. In general,a Moran’s I value near +1.0 indicates clustering, an index value near –1.0 indicates dispersion, and 0
indicates randomness. Additional terms are defined as follows:𝑐𝑤𝑖𝑗 = ∑𝑁 𝑖𝑗𝑐

𝑖=1 𝑖𝑗𝑐𝑖𝑗 (𝑖, 𝑗 = 1,2, … , 𝑁),

where cij takes the value of 1 when municipality i and j are contiguous, and it takes a value of 0 when
two municipalities are not contiguous. The spatial weight matrix W is based on the actual neighboring
relationship between municipalities using a queen-type contiguity.
The estimation results show that the Global Moran’s I statistics are positive and statisticallysignificant at the 1% level for each year from 1992 to 2012. For instance, the Global Moran’s I statistic
is 0.144 in 1992 and 0.202 in 2012. These results indicate that an agglomeration of waste landfill sites
has existed in some areas during the two decades.
Moreover, we estimate the Getis–Ord Gi* statistic (Getis and Ord 1992; Ord and Getis 1995) inorder to detect local patterns of spatial association. The Getis–Ord Gi* statistic is defined as follows:

𝐺∗ =

𝑁
∑𝑁
𝑖=1 ∑𝑗=1 𝑤𝑖,𝑗 𝑥𝑖 𝑥𝑗𝑁∑𝑁
𝑖=1 ∑𝑗=1 𝑥𝑖 𝑥𝑗.

The G* statistic calculated for each municipality is a Z score. A positive and larger Z score value
indicates more intense clustering of high values. A negative and smaller Z score value indicates more
intense clustering of low values. The specific test results and a description of the clusters for 1992 and2012 are presented in Figures 1 and 2, respectively. As shown in these figures, we find that the G*
statistics tend to be high for municipalities in Hokkaido prefecture. This result is reasonable because
Hokkaido is the prefecture with the largest livestock production in Japan, with many livestock farmers
in particular in the southeastern area. According to Hokkaido Prefecture (2012), half of the totalindustrial waste in Hokkaido prefecture is composed of animal manure. Thus, the livestock sector

8supplies a large amount of waste that lead to higher demand for landfill. In addition, Hokkaido is thelargest prefecture in terms of land area and has a sparse population. Therefore, more land is available
for waste landfill than in other prefectures. The figures suggest that, during the study period, the landfillsite cluster has moved toward the northwest from the southeast in Hokkaido prefecture.

4. Spatial Econometric Methodology
4.1 Model specifications
Following the analysis of the previous section, we estimate a spatial autoregressive tobit model(SAR tobit model) to incorporate the spatial dependence in a regression model and to investigate theregional characteristics that lead to higher landfill-site concentration. A SAR tobit model is defined asfollows:𝑦𝑖∗ = 𝛽0 + 𝜌𝑊𝛸 + 𝛸𝛽 + 𝜀𝑦∗𝑦𝑖 = { 𝑖0𝑖𝑓 𝑦𝑖∗ ≥ 0,
𝑖𝑓 𝑦𝑖 < 0where 𝑦𝑖∗ is the number of landfill sites managed by private companies for industrial waste per 10,000
residents in municipality i, which takes the value of 0 if no landfill site exists in the municipality; X isa vector of characteristics describing the site; W is the spatial weight matrix; and β and ρ are parameters.
The negative values in vector 𝑦𝑖∗ are set to 0 to reflect sample truncation at 0. The spatial
interdependence induces a truncated multivariate normal distribution (TMVN) for the latent variable,
which takes the following form:𝑦𝑖∗ ~𝑇𝑀𝑉𝑁(𝜇, 𝛺)
𝑠. 𝑡. 𝜇 = (𝐼𝑛 − 𝜌𝑊)−1 𝛸𝛽and 𝛺 = 𝜎𝜀2 [(𝐼𝑛 − 𝜌𝑊)′ (𝐼𝑛 − 𝜌𝑊)]−1,

subject to a vector of liner inequality restrictions 𝑎 ≤ 𝑦 ∗ ≤ 𝑏, where the truncation bounds depend on
the observed values of 𝑦. To estimate the spatial tobit model, we apply the Bayesian strategy of the9Markov Chain Monte Carlo (MCMC) sampling method (LeSage 1999, 2000; LeSage and Pace 2009).
LeSage (1997) suggested the estimation method for the spatial lag model (SLM) parameter by using
the MCMC, which allows for a direct estimation of the influence of heteroskedasticity. In ourestimation, the parameters are estimated using the Gibbs sampling method on the basis of 1,000
retained draws from a sample of 1,100.
We also investigate the OLS model without taking into account the spatial correlation, which isdefined as follows:𝑦 = 𝛽0 + 𝜌𝑊𝛸 + 𝛸𝛽 + 𝜇
𝜇 = 𝜆𝑊𝜇 + 𝜀,

where 𝜌 and 𝜆 are spatial autocorrelation parameters; W is the spatial weight matrix; and 𝜇 is theerror term. Then, 𝜌 = 𝜆 = 0 in the simple OLS based on the null hypothesis of no spatial correlation.
If the dependent variable is spatially correlated, 𝜌 ≠ 0, 𝜆 ≠ 0 , and the OLS estimator leads tosignificant model misspecification and biased parameter estimates (Anselin, 1988; LeSage and Pace,2009). Thus, we test the null of no spatial correlation in the OLS residual by using Moran’s I, theLagrange multiplier, and Robust Lagrange multiplier tests. Although Moran’s I and the Lagrange
multiplier test for both lags and errors under the null of no spatial correlation, the Robust Lagrange
multiplier tests for lags and errors under the null of 𝜌 = 0 and 𝜆 = 0 without restrictions on thevalues of 𝜌 and 𝜆.

4.2 Data and explanatory variables
The locations of industrial-waste landfill sites in Japan have not been made publicly available,
even though the prefectural governments obtain this information through the construction permission
process. We sent requests to all prefectural governments in Japan for information disclosure of thelandfill sites after 1992, when the licensing system to construct, operate, and close landfill sites was
initiated. As a result, we obtained information on location, operating years, type of waste, and type ofsite for 2,164 industrial-waste landfill sites (1,757 private landfill sites, 579 hazardous landfill sites,and 177 public landfill sites) that operated from 1992 to 2012. The number of operating private landfill

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sites is 1,071 for 1992 and 893 for 2012. The number of landfill sites increased from 1992 until 1998
and then decreased by 34% from 1999 to 2012. Figures 3 and 4 indicate the locations of the industrialwaste landfill sites in operation in 1992 and 2012. We find that 72% of Japanese municipalities in1992 and 75% in 2012 had no industrial landfill sites.
These location data cover all 1,692 municipalities in Japan that share a border with at least one
other municipality, and they are aggregated at the municipality level. Municipality-level data provide
us with detailed information to investigate the location of private landfill sites by considering thecharacteristics of local communities that locate the landfill sites. To adequately analyze theconcentration of landfill sites, prefectural-level data are too crude and do not reflect the geographicaldistribution and its determinants. For instance, prefectural-level data cannot distinguish between a casein which all landfill sites are concentrated in a few municipalities within a prefecture and a case inwhich these sites are distributed evenly across all municipalities, even though the total number oflandfill sites in a prefecture remains the same. Moreover, long-term data enable us to investigate thechanges in the spatial distribution of waste landfill sites. Because industrial-waste landfill sites operate
for an average of 11 years, their locations might have changed considerably during our sample period(that is, 20 years). In fact, out of 893 private landfill sites that were operating in 2012, less than half(398 sites) have been operating since 1992.
We hypothesize that the following five factors influence the location of landfill sites.

Economic factor
The first factor is private costs and benefits for waste-management companies when locating
landfill sites in particular municipalities. Fortenbery et al. (2013) suggested that input markets have asignificant effect on the location of biodiesel refineries. A similar effect might affect the location ofwaste landfill sites. For industrial waste, the input for landfill sites is the waste generated by industrial
activities. This study uses four variables for the economic factor: (1) the amount of industrial waste
generated at the prefectural level, (2) the revenue from the local manufacturing sector’s production
measured at the municipal level, (3) the total length of the highway infrastructure measured at theprefectural level, and (4) the land price measured at the municipal level. The amount of industrial
waste captures the supply of waste for landfills within the prefecture.v The total production revenue
by the local manufacturing sector captures the demand for waste landfill in the municipality. The total

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length of the prefecture’s highways reflects the amount of transportation infrastructure, and a greater
length should be associated with lower transportation costs. The land price constitutes a significant
part of the fixed cost when companies construct landfill sites.
Data on industrial-waste generation are drawn from the Survey on Industrial Waste Emissions andLandfill (Japanese Ministry of the Environment, respective years). Data on manufacturing production
are drawn from the census of manufacturers (Japanese Ministry of Economy, Trade and Industry,
respective years). Data on the total length of the highway infrastructure in each prefecture are drawn
from the Annual Report of Road Statistics (Japanese Ministry of Land, Infrastructure, Transport andTourism, respective years). We use the average land price in each municipality, which is reported inland-price investigations by prefectural governments. Land-price data for each year are derived fromthe Geographic Information Systems (GIS) database of the Geospatial Information Authority of Japan.

Existence of other waste-related facilities
The second factor is the existence of other waste-related facilities. To measure the impact of thisfactor, three variables are employed: the number of intermediate processing facilities for industrial
waste per capita, the number of landfill sites for hazardous waste per capita, and a dummy variable forindustrial-waste landfill sites managed by public-sector involvement. Intermediate processing
facilities and hazardous-waste facilities are both unwanted land uses that typically face significant
public opposition in their siting. Public opposition negatively affects site location for two reasons: (1)transaction costs become higher for waste-management companies to negotiate with inhabitants, and(2) opportunity costs also become higher as the construction and operation of a site are delayed. Thus,
waste-management companies tend to locate landfill sites in areas in which construction is easier—that is, areas with an existing landfill site. Intermediate waste-processing facilities include incineration
plants, recycling plants, crushing plants, and separation plants for industrial waste. This variable canalso be interpreted as access to input markets because the output of these intermediate facilities is,ultimately, waste that requires a final landfill. For a waste-management company to find a suitablelocation for hazardous-waste facilities is difficult because even stronger opposition from residents thanto an industrial-waste facility might exist. Thus, a higher number of other waste-related facilities per
capita in a municipality is expected to increase the number of private landfill sites for industrial-waste
per capita in that municipality. Data on intermediate processing facilities are derived from the Survey

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Report on Administrative Organizations for Industrial Waste by the Japanese Ministry of theEnvironment. Location data for hazardous-waste landfill sites were collected through our survey.
In contrast to these two waste-related facilities, industrial-waste landfill sites with public-sector
involvement are expected to reduce the concentration of private landfill sites within a municipality.
To facilitate using landfills for waste, some prefectural and municipal governments play an active rolein the construction of industrial-waste landfill sites. The main reason for this involvement is to reduce
objections from residents that may arise out of distrust of private companies pursuing economic returns.
In a municipality, we expect that landfill sites being operated by the public sector will lead to a lower
number of such sites because they can substitute for landfill sites managed by private companies. The
location data for these public industrial-waste landfill sites are also taken from the disclosure requests.

Environmental factor
The third factor is the environment. To obtain an allowance to begin construction, wastemanagement companies are required to follow environmental assessment procedures. Among thevarious aspects investigated during this process, we consider two representative factors that mightstrongly affect landfill site locations: the prefectural nature reserve and the amount of groundwater
usage at the prefecture level. By including these variables, we can examine whether a site location is
influenced by the consideration of the natural environment.
Data on nature reserves are based on prefectural nature conservation areas as of 1992 and 2012
(Japanese Ministry of Environment vi ). Under the Japanese Nature Conservation Law, nature
conservation areas are classified as wilderness areas, nature conservation areas, and prefectural nature
conservation areas. Prefectural nature conservation areas are designated by prefectural governments,
and regulations on land use in such areas are less strict than for the other two types of areas. The naturedummy variable takes a value of 1 if a prefectural nature conservation area exists in the municipality,
and it takes a value of 0 otherwise. Data on groundwater usage are drawn from the Survey on the
Usage of Groundwater for Agriculture in 1991 and 2011 (Japanese Ministry of Agriculture, andFisheries, respective years).

Regional characteristics

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The fourth factor considered is regional characteristics. These include the unemployment rate,
population density, percentages of agricultural and manufacturing workers, the municipal financial
stability index, and two dummy variables related to population size (municipalities with less than
10,000 people and those with more than 200,000 people). The unemployment rate captures theenvironmental justice aspect of locating waste-management facilities. Laurian and Funderburg (2014)
found that towns in France with large, vulnerable populations are more likely to host wasteincineration facilities. The unemployment variable allows us to test the hypothesis that industrial-waste
landfill sites might be spatially concentrated in municipalities with more disadvantaged populations.
High population density is a simple measure of the NIMBY syndrome, indicating that many
inhabitants who would oppose the construction and operation of a site potentially exist. Agricultural
workers might fear that landfill sites will leak pollutants and damage their crops. Conversely, a higher
ratio of manufacturing workers and a high municipal financial stability index value indicate greater
economic activity, and a municipality that has such characteristics is more likely to support landfillsite locations. Two dummy variables related to population are included to test whether industrial-waste
landfill sites are located in rural, urban, or other areas. Thus, we use two dummy variables: (1) Ruralarea dummy (1 = municipality with less than a population of 10,000; 0 = others) and (2) Urban area
dummyvii (1= municipality with a population of more than 200,000; 0 = others).
Unemployment, population density, percentages of agricultural and manufacturing workers, andpopulation data are drawn from the 1990 and 2010 National Census (Japanese Ministry of Internal
Affairs and Communications). The municipal financial stability index is drawn from the financial
indicators of local governments for 1992 and 2012 (Japanese Ministry of Internal Affairs andCommunications).

Policies
The last factor considered is the policy implemented by prefectural-level governments. In thisstudy, we look in particular at the impact of industrial-waste taxation and waste-trade restrictions.
Sasao (2014) examined the effects of these policy instruments on waste generation and transfer andfound that industrial-waste taxes in Japan have minimal effects on the reduction of the amount of waste
for landfill sites, whereas waste-trade restrictions in destination prefectures decrease the inflow ofwaste to their landfill sites. The introduction of an industrial-waste tax and waste-trade restrictions by

14

some prefectural governments decreased the demand for waste-landfill services and might haveaffected location decisions by encouraging the avoidance of prefectures with stricter regulations. We
use dummy variables to represent the introduction of an industrial-waste tax and waste-trade
restrictions.viii Because the first introduction of an industrial-waste tax was in 2002, we include theindustrial-waste tax variable only in the 2012 model.
Data for the industrial-waste tax are drawn from the 2011 survey report on the condition of local
governments implementing an industrial-waste tax (Hiroshima Prefecture). The data for waste-trade
restrictions are drawn from the survey report on the administration of industrial waste (Japan Leasing
Association).

5. Results
To compare the factors that affect the location of waste landfill sites in 1992 and 2012, we estimate
models that take the number of industrial-waste landfill sites per capita in each year as the dependent
variable. Because of the high correlation between the amount of industrial waste and the length of the
highway infrastructure, as well as between land price and population density, we do not include themin the same model.
To begin, we test the null hypothesis of no spatial correlation in the OLS residual by using Moran’s
I, the Lagrange multiplier, and Robust Lagrange multiplier tests. The results are presented in Table 1.
The Moran’s I tests are statistically significant at the 1% level in all models, indicating the existenceof a spatial concentration in both years. The Lagrange multiplier tests are also statistically significant
at the 1% level, which indicates the null hypothesis that no spatial correlation can be rejected at the
1% level for the spatial error and lag models. The Robust Lagrange multiplier test for the spatial error
model is not statistically significant in 1992 and is statistically significant at the 10% level in 2012. In
contrast, the Robust Lagrange multiplier test for the SLM is statistically significant at the 1% level in1992 and 2012. This result suggests that we focus on the SLM in 1992 and 2012.
Based upon these results, we estimate the SAR tobit model to incorporate spatial dependence. The
results are presented in Table 2 and show that the spatial lag parameter ρ is statistically significant inall models. These results indicate that private landfill sites for industrial waste have been consistently
concentrated in some areas for more than 20 years. Thus, we found strong support for our first15

hypothesis, together with the result of Moran’s I statistics. The fifth to eighth columns in Table 2 arerobustness checks by estimations using the landfill site per land area (km2) of municipality as adependent variable. The result is similar to that of the model using the number of landfill sites per
capita as a dependent variable.
Interestingly, the structure of the location of private landfill sites for industrial waste has been
fairly stable for 20 years. In both 1992 and 2012, economic factors were decisive in determining thelocation of industrial-waste landfill sites. The amount of industrial waste and total revenue frommanufacturing production are positive and statistically significant. These results show that the locationof industrial-waste landfill sites is sensitive to the regional demand for a waste landfill. The total lengthof the highway infrastructure within a municipality is statistically significant and positive, suggestingthat transportation infrastructure strongly affects landfill site locations. This result also implies thattransportation costs constitute a significant part of landfill costs. Land price is statistically significant
and negative in all models. This result is reasonable because a higher land price implies higher costsof locating sites. In addition, the estimated coefficient of land price in the 2012 model is two times
higher than that of the 1992 model. The result suggests that the increasing cost as a result of stricter
regulations might affect the distribution of sites to concentrate them in an area with lower construction
and operating costs for waste disposal. Population density is also statistically significant and negativein all models. Although waste-management companies hope to find an optimal location for landfill
operations, nearby residents often oppose site construction. The estimated coefficient of the population
density in the 2012 model is larger than that of the 1992 model. These results suggest that the NIMBY
issue is becoming more serious.
We found positive and statistically significant coefficients for the number of intermediate
processing facilities for industrial waste per capita and the number of hazardous-waste landfill sites
per capita in 1992 and 2012. Presumably, a larger number of waste-related facilities are associatedwith a larger number of industrial-waste landfill sites, which is in line with findings by Ishimura and
Takeuchi (2017). In addition, the coefficient for population density is negative and statisticallysignificant. These results suggest that industrial-waste landfill sites tend to be located in areas in whichconstruction is easier, such as areas with an existing landfill site and lower transaction and opportunity
costs. The publicly supported site variable is positive and statistically significant at the 10% level.

16Regarding the environmental factor, the amount of groundwater usage is statistically significant
with negative coefficients in all models. This result suggests that municipalities with moregroundwater usage are less likely to locate landfill sites. Because a higher dependence on groundwatermeans a stronger possibility of pollution damage from the sites, the negative coefficient of the variable
is in line with our expectation.
The unemployment variable is positive but not statistically significant in either year, which does
not support the findings of Laurian and Funderburg (2014). The percentage of agricultural workers has
a positive and statistically significant coefficient in 2012, whereas the percentage of manufacturing
workers is negative and has a statistically significant coefficient in 1992 and 2012. These results
indicate that waste-management companies tend to locate landfill sites in municipalities with larger
populations of agricultural workers. The dummy variable for populations under 10,000 individuals is
negatively correlated with the concentration of landfill sites, whereas the dummy variable forpopulations over 200,000 individuals is positively correlated. These results imply that landfill sites
tend to be located in urban areas.
Policy variables, industrial-waste tax, and trade restrictions are not statistically significant in mostmodels examined in this study. The industrial-waste taxation variable is positive and statisticallysignificant in one model, but the statistical significance is weak, suggesting that these policy
instruments have not affected the location of landfill sites very strongly, even though Sasao (2014)
showed that waste-trade restrictions had some impact on the inflow of waste. Another complication
regarding these variables is the endogeneity of polices. Prefectural governments likely introduce thesepolicies when the number of sites in their administrative area is high. Thus, we examine the effect ofpolicies by taking the incremental number of landfill sites as the dependent variable. Table 3 reports
the estimation results of the effect of policy variables on the number of newly constructed sites. Notethat because the number of newly constructed sites is only about 20 in Japan after 1997, we use
prefectural-level panel data from 1992 to 2012. In addition, we attempt to capture the possible
endogeneity of policy variables by using their lagged values in the estimation.ix All estimations are
based on a panel tobit modelx and 940 observations. We find that both dummy variables for industrialwaste tax and trade restrictions are negative and statistically significant. These results indicate that theimplementation of an industrial-waste tax and trade restrictions on industrial-waste shipments
decreases the number of private landfill sites constructed, which supports the findings by Mulatu and17

Wossink (2014) and Stafford (2000). The coefficient for industrial-waste tax in the first column
implies that prefectures with a waste-disposal tax have approximately 1.068 sites less than otherprefectures. Similarly, waste-trade restrictions decrease the number of landfill sites in that prefecture
by 1.415. Because the enforcement of local regulations affects disposal prices and, therefore, thedemand for waste disposal, the new constructions are attracted to areas with lax regulations.

6. Conclusions
In this study, we have explored the mechanism behind the locational concentration of private
landfill sites for industrial waste. The empirical results suggest that a spatial concentration of landfill
sites existed over 20 years. Moreover, we found that the determinants of location have not changed for
20 years. Economic factors, such as input markets and transport infrastructure, play a significant rolein determining the location of private landfill sites. Therefore, the differences in the geographicaladvantages and economic structures between regions would cause a spatial concentration of landfill
sites. These findings suggest that even if the unwanted facility deals with “bads,” the locational
concentration of these facilities adapt to the theory of spatial competition between companies dealing
with “goods” (Hoteling 1929).
Our results provide several implications for addressing NIMBY issues. Although economic factors
play a decisive role in locating landfill sites, this process might lead to the uneven distribution of
unwanted facilities among local communities. In addition, our empirical results indicate that theimplementation of local policies, such as an industrial-waste tax and trade restrictions, could have
reduced the number of landfill sites in that prefecture. Although these policy instruments in a given
area reduce the number of sites there, they might also shift the site locations to other areas, particularly
to their neighborhood municipalities. In that sense, the concentration of landfill sites in some areas
might be attributable to the lax regulations of local administrations. To mitigate NIMBY attitudes,
developing policy coordination by multiple local governments in order to avoid a concentration oflandfill sites is important.
The empirical results of this study also indicate that regions with lower land prices tend to attract
landfill sites, and this tendency is stronger than it was 20 years ago. As many hedonic studies havesuggested, a negative external economy of a waste-related facility causes land prices to decline around18

the site. This decline may cause a further concentration of unwanted facilities owing to their attraction
to lower land prices. A possible extension of this study is to incorporate such spillover effects and theresulting agglomeration of facilities that further decrease land prices in their neighborhoods.

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22

Tables
Table 1: Estimation results: Ordinary least squares

Coef.
Landfill site for hazardous waste
0.260(0.083)
Intermediate site for industrial waste
0.047(0.028)Publicly supported landfill site
0.026
(0.064)
Population density−0.002(0.001)
Land price
Unemployment
Agricultural workers
Manufacturing workers
Municipal financial stability index
Population under 10,000
Population over 200,000
Nature reserve
Amount of groundwater
Total manufacturing revenue
Amount of industrial waste−0.008(0.011)
0.009(0.003)−0.003(0.003)−0.039(0.055)−0.027(0.034)0.008(0.063)−0.020(0.032)0.000(0.000)0.000(0.000)0.103(0.015)

Length of highway infrastructure
Industrial-waste tax
Waste-trade restriction
Intercept
Moran’s I
LM errLM lag
RLM err
RLM lagObs.

0.027(0.035)0.016(0.089)0.090
31.60635.134
2.027
5.556
1,692

Number of landfill sites
for industrial waste per residents
1992
2012
Coef.
Coef.
Coef.
***
***
***
0.256
0.272
0.269
(0.082)(0.036)(0.036)*0.012
0.054 **
0.008
(0.027)(0.023)(0.022)
0.021
0.075
0.064
(0.064)(0.064)(0.064)***−0.001 **(0.001)0.000
0.000(0.000)(0.001)−0.004−0.0030.000(0.011)(0.007)(0.007)***0.008 ***
0.015 ***
0.015
(0.003)(0.004)(0.004)−0.004−0.004−0.012(0.003)(0.004)(0.004)0.035−0.0390.001(0.053)(0.066)(0.066)−0.041−0.042−0.065(0.034)(0.037)(0.037)−0.045−0.020−0.059(0.059)(0.063)(0.059)−0.013−0.048−0.048(0.032)(0.033)(0.033)
*
0.000
0.000
0.000
(0.000)(0.000)(0.000)
0.000
0.000
0.000
(0.000)(0.000)(0.000)***0.154 ***
(0.014)
***
0.090
0.089
(0.010)(0.008)0.024
0.017(0.031)(0.031)0.008−0.010−0.012(0.034)(0.038)(0.037)−0.026−0.101−0.008(0.088)(0.101)(0.096)***0.078 ***
0.063 ***
0.062
***
***
23.88815.346 *** 14.783***
25.572 ***18.985 *** 18.554
1.075
2.988 *
3.565
**
*
2.759
6.628 **
7.336
1,692
1,692
1,692

Note: Standard errors are given in parentheses. * p < 0.10; ** p < 0.05; *** p < 0.01.

23

***

***

***

*

***

***
***
***
*
***

Table 2: Estimation results: Spatial tobit model (MCMC)

Coef.
Landfill site for hazardous waste
0.836(0.267)
Intermediate site for industrial waste
0.296(0.097)
Publicly supported landfill site
0.350
(0.201)
Population density−0.016(0.003)
Land price
Unemployment
Agricultural workers
Manufacturing workers
Municipal financial stability index
Population under 10,000
Population over 200,000
Nature reserve
Amount of groundwater
Total manufacturing revenue
Amount of industrial waste
Length of highway infrastructure−0.042(0.043)0.013(0.011)−0.020(0.011)−0.064(0.208)−0.828(0.159)0.613(0.217)0.044(0.115)−0.001(0.000)0.002(0.001)0.201(0.052)

Number of landfill sites
for industrial waste per residents
1992
2012
Coef.
Coef.
Coef.
***
***
***
0.720
0.543
0.540
(0.251)(0.116)(0.117)***0.188 **
0.221 **
0.244
(0.095)(0.087)(0.083)*0.276
0.364 *
0.488
(0.181)(0.216)(0.217)***−0.049 ***(0.010)−0.022 ***−0.048(0.005)(0.013)−0.033−0.017−0.023(0.042)(0.030)(0.029)0.009
0.034 **
0.034
(0.010)(0.014)(0.014)*−0.025 **−0.026−0.041(0.011)(0.017)(0.015)0.348 *
0.552 *
0.315
(0.202)(0.291)(0.287)***−0.827 ***−1.074 *** −1.153(0.145)(0.166)(0.177)***0.403 **
0.855 ***
0.540
(0.205)(0.257)(0.239)0.034−0.132−0.038(0.111)(0.133)(0.134)**−0.001 **−0.001 ** −0.001(0.000)(0.001)(0.001)**0.003 ***
0.002
0.002
(0.001)(0.001)(0.001)***
0.322 ***
(0.054)0.227 ***
0.174
(0.035)(0.031)

24

***

***

**

Coef.
1.658
(0.621)
0.638(0.219)0.872(0.465)−0.034(0.007)

***

**

***

***

**

*

**

***

0.021
(0.096)−0.002(0.025)−0.020(0.025)0.622(0.452)−2.069(0.343)1.170(0.466)0.205(0.272)−0.002(0.001)
0.005(0.002)
0.272(0.116)

Number of landfill sites
for industrial waste per area
1922
2012
Coef.
Coef.
Coef.
***
**
***
1.455
0.522
0.546
(0.586)(0.168)(0.173)
***
*
**
0.413
0.279
0.358
(0.219)(0.121)(0.122)
*
*
0.715
0.334
0.517
(0.428)(0.293)(0.321)******−0.063(0.011)−0.053 ***−0.083(0.008)(0.028)
0.018
0.017
0.009
(0.100)(0.042)(0.043)−0.0130.022
0.025(0.026)(0.020)(0.022)−0.033−0.033−0.043(0.024)(0.024)(0.023)
***
***
1.465
1.630
1.333
(0.462)(0.369)(0.407)***−2.101 ***−1.895 *** −2.087(0.351)(0.262)(0.304)
**
**
***
0.916
1.229
0.928
(0.460)(0.351)(0.346)0.172−0.196−0.045(0.254)(0.195)(0.191)***−0.002 ***−0.002 *** −0.002(0.001)(0.001)(0.001)
**
***
*
0.007
0.003
0.003
(0.002)(0.002)(0.002)
**
***
0.286
(0.073)
***
0.355
0.166
(0.084)(0.045)

***

***

***

*

***

***

***

**

*

***

Industrial-waste tax
Waste-trade restrictionρIntercept
Obs.

0.183
(0.121)0.305(0.051)−0.865(0.332)
1,692

***

***

0.181
(0.113)0.240(0.049)−1.036(0.322)
1,692

***

***

0.205
(0.119)0.047(0.147)0.211(0.054)−1.703(0.417)
1,692

*

***

***

0.138
(0.121)0.118(0.148)0.238(0.054)−1.622(0.413)
1,692

Note: Standard errors are given in parentheses. * p < 0.10; ** p < 0.05; *** p < 0.01.

25

***

***

0.412
(0.264)0.288(0.048)−2.375(0.773)
1,692

***

***

0.419
(0.257)0.255(0.051)−2.560(0.794)
1,692

***

***

0.380
(0.165)0.136(0.206)0.246(0.051)−2.650(0.595)
1,692

**

***

***

0.342
(0.178)0.255(0.216)0.274(0.057)−2.805(0.631)
1,692

*

***

***

Table 3: Estimation results: Panel tobit model
Number of new disposal sites for industrial waste
sites
per residents
per area
Coef.
Coef.
Coef.
Industrial-waste tax−1.068 **−0.058 ***−2.307 ***(0.482)(0.020)(0.713)
Waste-trade restriction−1.415 ***−0.059 ***−1.607 **(0.510)(0.020)(0.702)
Population density−0.322 ***−0.010 ***−0.250 ***(0.072)(0.002)(0.070)Land price−1.656 ***−0.075 ***−2.696 ***(0.517)(0.021)(0.732)Nature reserve−2.646 *−0.087 *−2.835 **(1.555)(0.049)(1.296)
Amount of groundwater
0.409
0.018 **
0.574 **
(0.264)(0.009)(0.292)
Total manufacturing revenue
2.671 ***
0.060 *
3.357 ***
(0.998)(0.033)(0.989)Amount of industrial waste
0.241 ***
0.007 **
0.097
(0.092)(0.003)(0.092)
Length of highway infrastructure−0.031 ***−0.001 ***−0.015 ***(0.005)(0.000)(0.006)
Intercept
5.426 ***
0.196 ***
5.248 ***
(1.503)(0.053)(1.734)Log likelihood−1,117.421−138.531−1,276.756
Wald-χ2
136.6
96.47
78.3
Obs.

940

940

940

Note: Standard errors are given in parentheses. * p < 0.10; ** p < 0.05; *** p < 0.01.

26

Figure titles
Figure 1: Spatial clustering of landfill sites via Getis–Ord Gi* of 1992
Figure 2: Spatial clustering of landfill sites via Getis–Ord Gi* of 2012
Figure 3: Locations of industrial-waste landfill sites operating in 1992
Figure 4: Locations of industrial-waste landfill sites operating in 201227

Figure 1: Spatial clustering of landfill sites via Getis–Ord Gi* of 1992

6.0
3.0
0.0
-0.3
0

400km

28

Figure 2: Spatial clustering of landfill sites via Getis–Ord Gi* of 2012

6.0
3.0
0.0
-0.3
0

400km

29

Figure 3: Locations of industrial-waste landfill sites operating in 1992●

= Landfill sites

30

Figure 4: Locations of industrial-waste landfill sites operating in 2012

● = Landfill sites

31FootnotesiPrevious studies on the location of waste treatment facilities mainly focused on normative issues.
Kunreuther and Kleindorfer (1986) proposed a sealed-bid mechanism to elicit citizens’ willingness toaccept facilities. Minehart and Neeman (2002) presented a modified second-price auction procedure
for choosing a site location. Swallow et al. (1992) proposed a three-phased approach that integrates
the technical, economic, and political dimensions related to the landfill -siting process.
ii

Ishimura and Takeuchi (2017) examined the spatial concentration of landfill sites for industrial
waste by using cross-sectional data in 2012.
iii

Local Japanese governments are divided into two tiers: prefectural governments and municipalities(cities, towns, and villages). The nation has 47 prefectures. The number of municipalities was 1,724
as of April 2018.
iv

Data on landfill site shipments before 2000 are not available.

v

Data on the amount of industrial waste generated and highway length at the municipality level areunavailable.
vi

http://www.env.go.jp/park/doc/data.html (accessed April 27, 2018).

vii

In Japan, a local municipality with more than 200,000 inhabitants is defined as a large city.

viii

Because all prefectures apply same tax rate, it is not possible to use the level of tax rate for theindustrial-waste tax variable.
ix

Considering the endogeneity of policy variables, we remove the variables for intermediate
processing facilities, hazardous-waste landfill sites, and public landfill sites from the explanatory
variables in the estimation.
x

Because prefectural-level data are too crude, we do not use the spatial tobit model; instead, use an
ordinary tobit model as the regression model. In addition, for a similar cause, we do not use theexplanatory variables related to municipal-level data.

32