Journal of Applied Input-Output Analysis, Vol. 3, 1996

An Interregional Input-Output Table of Mie Prefecture, Japan:

Estimation and Applications1

By

Mitsuo Yamada*

Abstract
We will attempt to estimate an interregional input-output table of Mie Prefecture for

1985, which consists of five subregions. Combining this table and the national table of thesame year, we will compile a nation-wide interregional input-output table. We will show
two applications: one to evaluate the effects of public investment by a local government,

and the other to evaluate the effects of the nuclear power station planned in the prefecture.
We can observe some regional characteristics in both cases.

1. Introduction
In Japan, many input-output tables have been estimated for both national and regional
economies. National input-output tables have been compiled every five years
beginning in 1950 by the Management and Coordination Agency and other related

Ministries cooperatively, and also interregional input-output tables for nine regions
covering the whole of Japan have been estimated by MITI. In addition, local

governments now produce estimations of their own input-output tables in almost all
prefectures and some large cities. Regions defined in such estimations are usuallyadministrative units because of data availability and the policy-oriented use of thetables. However, each table should be suited to its own specific analytical purposes.
There have been some attempts to disaggregate the area of a prefecture into several
subregions and to estimate some kind of interregional input-output table to captureinterregional interdependences among them. One example is a table for Ehime

Prefecture, 1988, and another is for Hokkaido Prefecture, 19852. In this paper, we will

present an interregional input-output table for Mie Prefecture, 1985, in which theinterdependence of subregions in the prefecture will be indicated.
Mie Prefecture is located almost at the center of Honshu Island in Japan (SeeFigure 1). Its population was about 1.8 million persons in 1990, or 1.5 percent of theJapanese population. The value of its production was 4,505 billion yen in 1990, which

Manuscript received May 13, 1996. Revised November 19, 1996.

* Mie University, Japan

1 The author thanks the anonymous referee for useful comments and suggestions.
2 Tsubouchi (1991) discussed the estimation of Ehime Prefecture's input-output table, and Takahata(1992) introduced the input-output table of Hokkaido Prefecture.

An Interregional Input-Output Table of Mie Prefecture, Japan

65

JAPAN

Figure 1: Location of Mie Prefecture

was about 1.1 percent of the Japanese GDP. There are five areas in the prefecture:

Hokusei, Chusei, Nansei, Iga, and Higashikisyu. The Hokusei area in the northern partof the prefecture is characterized as the industrial area, in which many chemical andmachinery industries are located. These industries have been leading the growth of thelocal economy. The Chusei area in the central part is regarded as the administrative
functioning area where Tsu City, the capital of the prefecture, is located. However, therelative weakness of industrial competitiveness in the Chusei area has prompted it toseek out ways to promote some high-technology industries. The Iga area in thenorthwestern part has played a historically important role culturally and socially inconnection with the Kansai Metropolitan Area, and now the population of this area is

66

Journal of Applied Input-Output Analysis, Vol. 3, 1996

growing as a bed town of the Kansai area. The Nansei area and the Higashikisyu areain the southern part of the prefecture are characterized by many natural and historicalsightseeing resources, such as Ise-Shima National Park and the Isejingu Shrine.
Though a large number of tourists visit these areas, especially from the Kansai and
Chubu regions, every year, they strongly require regional development assistancebecause they have many depopulated areas.

Combining the 1985 input-output table of Mie Prefecture and the national table,

we can estimate a nation-wide interregional input-output table for six subregions: the

Hokusei area, Chusei area, Nansei area, Iga area, Higashikisyu area, and the rest of

the nation3. We will discuss the method of estimation and analyze the interdependence
among the regions in the sections 2 and 3, respectively. In section 4, we will show two

applications of this table: one to evaluate the effects of the nuclear power station
planned in the Nansei area.

2. Method of Estimation
In this section, we will discuss the method used to estimate the interregional inputoutput table from the 1985 table of Mie Prefecture with 84 sectors. The method is

divided into four steps. To start with, we will disaggregate a prefectural table into fivetables for each subregion. Second, we will estimate interregional commodity flows
among the subregions. Then data relating to the rest of Japan will be compiled. Finally,
all the tables will be combined into one interregional table using the information oncommodity flows.

2.1. Spatial Disaggregation in the PrefectureFirst, we disaggregate a production vector of the prefecture into five vectors, one foreach subregion, using available regional statistics.

For example, the sales ofmanufacturing sectors can be compiled for the five subregions in each sector from the
Manufacturing Census Statistics. Then we can divide the production of the prefecture
into each subregion's vector by the ratio of the subregion's sales value to theprefecture's vector. Assuming the equality of the input coefficients and value-added
coefficients among the subregions for each sector, we can determine the subregional

input vector and value-added vector by multiplying the subregional value of
production by the same coefficients.

The way to disaggregate final demand vectors is as follows. In respect toconsumption expenditure outside households, the contribution to final demand is thesame as the summation of consumption expenditure outside households in the value-

3 The Hokusei and Iga areas are located in the northern part of Mie Prefecture, and the central part iscalled the Chusei area. The Nansei and Higashikisyu areas belong to the southern part of theprefecture.

An Interregional Input-Output Table of Mie Prefecture, Japan67

added sectors, whose values we have estimated for each subregion. So we can derive

the column vector by multiplying this summation value by the average sharecoefficients, which are assumed to be the same for each region.

The consumption expenditures of households are estimated using Farm Census

Statistics and Family Expenditure Survey Statistics. We can determine the expenditurevalues of both the average farm family and the average non-farm family by surveying
10 items: food, housing, clothing, electricity and fuel, education, etc. These values arefor the prefecture. However, data on the numbers of farm and non-farm families isavailable for each subregion. Then we can calculate the values of expenditures on the
10 items for each subregion by multiplying the average expenditures by number offamilies. Using this information, we can derive the vector of household consumption
expenditures for each subregion.

Only seven sectors have non-zero values for the vector of general government
consumption:water supply,

sanitary services, transport,

public administration,

education, research, and health and social insurance. The value of the education sector

is calculated according to the share of the regional number of teachers and other schoolstaff. The value of health and social insurance is spatially disaggregated using hospital
numbers. Other values are determined according to the regional share of current
expenditures of local governments located in each subregion.

In the case of gross domestic fixed capital formation, the investment demand of theconstruction and public engineering sectors is the same as the production of those
sectors, which we have already estimated for each subregion. Using this information,

we can divide the values of the other sectors into five subregions. To disaggregate thevector of the increase of stocks, we use the regional share of the sum of theintermediate demand and final demand that appear so far.
With exports and imports, both international and interprefectural, we can derive

regional vectors assuming that export-output ratios are the same among all subregions
and that import coefficients, which are the ratio of import to total internal demands,
are also the same.

After some adjustments for inconsistencies between sectors, we get an inputoutput table of 84 sectors for each subregion, from which we can observe somecharacteristics of regional structures and trade balances, both international andinterprefectural, some of which will be described in the next section.

2.2. Commodity Flows among Subregions
Data about commodity flows between prefectures, which is surveyed by the Ministryof Transport, is available, whereas there are few such statistics for subregions in
prefectures. Fortunately, we can get information about commodity flows among
subregions in Mie Prefecture from 1992 survey data. This survey data shows
commodity flows among the five subregions in Mie Prefecture already defined. The

data is compiled from 268 manufacturing and wholesale and retail trade companies
and 31 transportation companies. The reported values, as a whole, cover about 5
percent of the total volume of commodity flows in Mie Prefecture. We can use thisinformation to compile interregional commodity flow tables by sector in spite of the68

Journal of Applied Input-Output Analysis, Vol. 3, 1996

Table 1 :The Matrix of Interregional Commodity Flows
Mie Prefecture
Production

Hokusei

Chusei

Nansei

Iga

Higashikisyu

Outside the Region

Hokusei

Tu

T12

Tl3

Tl4

Tl5

El

Xi

Chusei

T21

T22

T23

T24

T25

E2

X2

Nansei

T31

T32

T33

T34

T35

E3

X3

Iga

T41

T42

T43

T44

T45

E4

X4

Hokusei

T51

T52

T53

T54

TS5

E 5

X5

Outside the Region

Ml

M2

M3

M4

Ms

Xoo

Xo

Total Demand

Di

D2

D3

D4

Ds

Do

Mie Prefecture

difference in years between statistics: the input-output table is for 1985 and the survey
data of commodity flows is for 1992.

We will now explain the method of estimation of commodity flows among thesubregions in the prefecture. First, since the survey data on commodity flows in theprefecture is tonnage based, we should convert the data from a tonnage base to amonetary base. Each company reported sales volumes of their own establishments in

one subregion that were delivered to other regions on a tonnage base and total values
on a monetary base. So we can derive sales from each establishment in a subregion ona monetary base, multiplying the total sales values by the regional share of volume
distribution for each establishment. Commodity flow matrices for the five subregions
are made by summing up each establishment's data. These matrices are prepared forthe manufacturing, heavy industry, light industry, wholesale and retail trade, andtransportation sectors.

This matrix data gives us the information to estimate interregional commodity
flows for 84 sectors in 1985. Table 1 illustrates the interregional relationship ofcommodity flows for one sector. Ty represents the value of commodity flows fromsubregion / to subregion j in the prefecture. Q illustrates the value of exports fromsubregion / to outside the prefecture. Mi is the value of imports for subregion/ fromoutside the prefecture. % represents the production of subregion/ , and D, the total
demand of subregion/ . We can get all the values except T^ from the 1985 table ofestimation for each subregion.
Given the data on subregion/ 's supply to the prefecture, S^^-E^, and given

subregion j fs demand within the prefecture,

EDj^Dj-Mj, we can estimate

2£

consistently for each sector by the RAS iterative method using the export rate, using
the above survey data as the initial value.

2.3. Outside the Prefecture
To create a nation-wide interregional input-output table, we must prepare a table ofthe outer region. This table can be easily estimated from the national table and the Mie

An Interregional Input-Output Table of Mie Prefecture, Japan

69

Table 2: Estimated Input-Output Table, 1985
Unit:Billion Yen
Intermediate Demands
Hokusei

Chusei

Nansei

Higashikisyu

Rest of Japan

Total

Hokusei

1367.2

120.8

64.0

41.1

9.4

1889.73492.21080.9Iga

Chusei

167.3

446.3

38.2

20.1

6.7

402.2

Nansei

82.7

19.3

227.1

5.5

6.6

247.4

588.6

Iga

25.4

10.1

7.7

149.0

3.5

192.8

388.5

Higashikisyu

20.9

10.9

11.3

2.4

88.4

142.3

276.1

Rest of Japan

1880.4

510.3

316.9

203.8

138.9

339462.0342512.3

Total

3543.91117.7

665.2

421.9

253.6

342336.4

348338.6

Value Added

2278.31164.7

681.5

369.4

208.4

325504.0330206.3

Output5822.22282.41346.7

791.3

462.0

667840.0678544.6

Hokusei

Chusei

Higashikisyu

Rest of Japan

Total

Hokusei

953.6

74.3

38.2

13.8

12.5

714.1

1806.4

Chusei

74.1

704.6

24.1

10.4

9.2

261.4

1083.8

Nansei

59.5

25.6

329.3

5.9

7.8

259.6

687.6

Iga

12.4

9.0

4.2

219.0

3.1

108.1

355.7

Higashikisyu

2.6

1.8

2.7

0.2

128.0

47.7

183.0

Rest of Japan

507.0

315.5

174.9

100.6

73.1

314992.0316163.0

Total

1609.21130.7

573.3

349.8

233.7

316382.8320279.5

Final Demands, Domestic
Nansei

ExportImportHokusei

605.1

81.5

5822.2

Chusei

153.5

35.7

2282.4

Nansei90.3

19.9

1346.7

Iga

59.0

11.9

791.3

Higashikisyu

12.2

9.3

462.0

Rest of Japan

46625.037460.0667840.0

Total47545.037618.3

678544.6

Iga

OutputPrefecture table, because the outer region is defined as the remaining part of Japanafter subtracting Mie Prefecture.

The trade data between Mie Prefecture and the outer region can be obtained fromthe table of Mie Prefecture. We have already disaggregated the internal trade data into

five subregions within the prefecture. Then we can create commodity flow matrices for
all regions sector by sector.

2.4. Integration into a Nation-wide Interregional Input-Output Table
We can estimate a nation-wide interregional input-output table by combining inputoutput tables for each region and commodity trade flow matrices sector by sector. We
do this assuming that the import share tdtJ, which is the ratio of either 7^ to Dj or

70

Journal of Applied Input-Output Analysis, Vol. 3, 1996

Table 3: Output by Sector in Mie Prefecture
Unit: %, Billion Yen
Sectors

Mie, total

Hokusei

Chusei

NanseiIga1) Agriculture, forestry and fishery

3.20

0.70

0.77

1.10

0.29

0.35

2)Mining

0.07

0.03

0.02

0.01

0.01

0.01

3)Food production

4.30

2.22

1.19

0.44

0.34

0.10

4)Textile products

2.22

1.23

0.55

0.22

0.17

0.05

Higashikishu

5)Pulp, paper and wooden products

2.34

0.56

0.51

0.11

0.29

0.88

6)Chemical products

8.55

8.16

0.03

0.07

0.29

0.00

7)Petroleum refinery and coal products

4.85

4.18

0.00

0.00

0.00

0.67

8)Ceramic, stone and clay products

2.84

1.02

1.23

0.12

0.42

0.06

9)Steel

1.00

0.87

0.07

0.02

0.04

0.00

10)Non-ferrous metal

1.44

1.38

0.01

0.01

0.04

0.00

ll)Metal products

1.75

0.94

0.33

0.23

0.22

0.01

12)General machinery

4.43

2.82

0.29

0.30

0.98

0.04

13)Electric machinery

6.67

2.02

2.10

1.92

0.59

0.04

14)Transportation equipment

11.77

10.03

1.12

0.42

0.18

0.02

15)Precision instruments

0.11

0.04

0.07

0.00

0.00

0.00

16)Miscellaneous manufacturing products

4.05

1.68

0.75

1.05

0.54

0.03

17)Construction

6.22

2.89

1.64

0.71

0.76

0.22

18)Electric power, gas and hot water supply

1.39

0.44

0.56

0.15

0.08

0.16

19)Water supply and sanitary services

0.59

0.25

0.16

0.10

0.04

0.04

20)Trade

5.12

2.06

1.83

0.70

0.32

0.22

21 )Financial and insurance services

1.89

0.73

0.71

0.22

0.14

0.09
0.09

22)Real estate

2.64

1.23

0.74

0.32

0.25

23/Transport

4.74

3.06

0.85

0.42

0.21

0.19

24)Communication and broadcasting

0.67

0.19

0.26

0.11

0.06

0.06

25)Public administration

2.12

0.56

0.96

0.29

0.16

0.15

26)Education, research, medical services and health

6.92

2.36

2.61

1.08

0.48

0.38

27)Services

7.03

2.21

1.71

2.30

0.39

0.42

28)Office supplies

0.19

0.08

0.06

0.03

0.01

0.01

0.89

0.43

0.21

0.13

0.08

0.03

30)Total

100.00

54.39

21.32

12.58

7.39

4.32

Output

10705

5822

2282

1347

791

462

29)Activities not elsewhere classified

Mj to Dj, is the same among sectors in the same groups.

Table 2 shows the estimated input-output table, in which 84 sectors are summed
into one sector.

3. Regional Structure and Interregional Interdependence
In this section, we will examine some regional characteristics from the estimatedinput-output table.

Table 3 shows regional outputs, which are aggregated into 29 sectors in Mie
Prefecture. We find that economic activities are concentrated in the northern part ofAn Interregional Input-Output Table of Mie Prefecture, Japan

71

Table 4: Estimated Commodity Flows within Mie Prefecture, All Industries
Unit: Billion Yen, %, %Origin/Destination

Hokusei

Chusei

Nansei

Iga

Hokusei

2239.2

195.0

102.2

54.9

21.9

2613.3

Chusei241.4

1115.2

62.2

30.5

15.9

1465.4

Nansei

142.1

44.8

536.5

11.4

14.4

749.4

Iga

37.7

19.0

11.8

356.1

6.6

431.3

Higashikisyu
Mie, total

Origin/Destination

Higashikisyu

Mie, total

23.5

12.6

14.0

2.5

207.0

259.7

2684.11386.9

726.8

455.4

265.9

5519.3

Chusei

Nansei

Iga

Higashikisyu

Mie, total

Hokusei

85.69

7.46

3.91

2.10

0.84

100.00Chusei

16.47

76.10

4.25

2.08

1.09

100.00

Nansei

18.97

5.99

71.59

1.52

1.93

100.00

Iga

8.76

4.42

2.74

82.55

1.53

100.00Higashikisyu

9.06

4.88

5.40

0.97

79.69

100.00

48.63

25.13

13.17

8.25

4.82

100.00Chusei

Nansei

Iga

Higashikisyu

Mie, total

Mie, total

Origin/Destination

Hokusei

Hokusei

Hokusei

83.43

14.06

14.06

12.06

8.25

47.35

Chusei

8.99

80.41

8.57

6.70

6.00

26.55

Nansei

5.30

3.24

73.82

2.50

5.43

13.58

Iga

1.41

1.37

1.63

78.18

2.48

7.82

Higashikisyu

0.88

0.91

1.93

0.55

77.84

4.71

100.00100.00100.00100.00100.00100.00Mie, total

the prefecture: the output share of the Hokusei area is 54.39 percent, and that of the
Chusei area 21.32 percent.

Some differences in industrial structure can be observed among some areas. The

Hokusei area has the so-called Yokkaichi Kombinat, a petrochemical industrial
complex. Many machinery manufacturing industries are also located in the Hokuseiarea. The production share of machinery industries and petrochemical industries in the
total output of Mie Prefecture is high: transport equipment 11.77 percent, electricmachinery 6.67 percent, chemical products 8.55 percent, and petroleum refinery andcoal products 4.85 percent. Almost all of these sectors are located in the Hokusei area.

In the Chusei area, the share of the education, research, medical services andhealth sector is the highest at 2.61 percent, followed by the electric machinery sector at
2.10 percent.

The production of the agriculture, forestry and fishery sector is not so significant

compared with the other sectors. Actually this share in Mie Prefecture is only 3.2

percent. The Nansei area produces the most of all areas at 1.10 percent, followed by
the Hokusei area and the Chusei area.

The services sector accounts for 7.03 percent of the prefecture's total production.
The Nansei area, where there are many companies related to sightseeing and recreation,is the largest contributor.

72

Journal of Applied Input-Output Analysis, Vol. 3, 1996

Table 4 shows the bilateral trade of all commodities among areas within Mie

Prefecture. We find that each area demands more than 70 percent of its own goods andservices produced, and supplies more than 70 percent of its product to its own area.
These shares are highest in the Hokusei area, due to its high concentration of
population and production.

Second, we can observe a star-like connection in commodity flows, in which the
Hokusei area functions as the center.

4. Applications
In this section, we will show two applications of the estimated interregional inputoutput table.

4.1. Impacts of Public Investment by Local Government
The purpose of the first application is to study the impacts of public investment bylocal government. Tsu City, the capital city of Mie Prefecture located in the Chusei
area, has new projects for regional development and city renewal. For these projects,

the city will spend about 73.03 billion yen over 10 years starting in 1994, 55.51 billion
yen of which is for public investment and the rest for land purchase and removal
compensation.

We can examine the effect of this public investment expenditure on Tsu City, theother areas of Mie Prefecture,and outside the prefecture.

Public investment

expenditure creates new demand for production in many industrial sectors and regions.
To evaluate this effect, we compile a four-region, 29-sector interregional input-output
table. The four regions are defined as the Chusei area, the Hokusei area, other areas in

Mie Prefecture, and the rest of Japan. Tsu City is included in the Chusei area. The
sectors are aggregated from 84 to 29 to lessen the computational burden.

Table 5 shows that a public investment expenditure of 55.51 billion yen by Tsu
City creates 118.24 billion yen production in the nation as a whole, which means thatthe investment multiplier is 2.13. 58.10 percent of the increased output is shared in the

Chusei area, where the initial expenditure occurs, while 35.02 percent of the output

increase exists outside the prefecture, which shows the openness of the regional
economy. The Hokusei area receives 4.99 percent of the increased production, and theother areas of the prefecture only 1.90 percent. The leakage of demand outside theprefecture is larger than that inside the prefecture. In the case of Mie Prefecture, the

Hokusei area is more closely linked to the Chusei area than are other areas of theprefecture.

If we consider the consumption demand brought about by the increased income of
employees, which is part of the value-added increase, then production as a whole will
also be expected to rise by 170.37 billion yen. In this case, 46.24 percent of the rise inproduction is from the Chusei area, while 46.32 percent is from outside the prefecture.

The production increase of the Hokusei area is only 5.07 percent of the whole, and theother areas of the prefecture receive a 2.38 percent increase. More than half of total

An Interregional Input-Output Table of Mie Prefecture, Japan

73

Table 5: The Effect of Public Investment in Tsu City
Unit: Billion Yen

Public Investment

Hokusei

ChuseiRest of Mie

-

55.51

-

-

55.51

118.24

Total

Rest of Japan

Effects on Production
Induced Production

5.89

68.69

2.24

41.41

(Shares %)

4.99

58.10

1.90

35.02

100.0

(Multiplier)

0.106

1.237

0.040

0.746

2.130

170.37

Effects on Production
Including the secondary effects through consumption

Induced Production

9.63

78.78

4.03

78.92

(Shares %)

5.07

46.24

2.38

46.32

100.0

(Multiplier)

0.174

1.419

0.073

1.422

3.069

demand leaks out of the Chusei area. The multiplier of the Chusei area is 1.419, which
includes the effect of the increased demand in consumption.

Table 6 shows the effects of the increased production, by industrial sectors andregions. 31.43 percent of the induced production comes from the construction sector asa whole most of which is in the Chusei area. The increase in construction demand
creates intermediate demands in the ceramic, stone and clay products sector 5.04
percent, steel sector 3.60 percent, general machinery sector 2.57 percent, and so on.
On the other hand, consumption demand creates intermediate demand in the foodproducts sector 3.32 percent, electric machinery sector 1.26 percent, transportationequipment sector 1.38 percent, education, research, medical service and health sector

4.40 percent, and so on. Increased demand also induces production in the services
sector 7.21 percent, trade sector 6.10 percent, transportation sector 5.21 percent,financial and insurance services sector 2.94 percent, and real estate sector 3.05
percent.

Most of the increased demand in manufacturing products such as the foodproducts sector, electric machinery sector, and transport equipment sector leaks out of

the region, especially outside of the prefecture. However, demand in the service sector,
financial and insurance services sector, real estate sector, and education, research,

medical services and health sector is largely expected to remain in the Chusei area.

Some of the increased demand in manufacturing goods such as the ceramic, stone andclay products sector, general machinery sector, chemical products sector,

andtransportation sector are satisfied in the Hokusei area.
4.2. Economic Effects of the Construction of a Nuclear Power Station
The second application is related to the construction of a nuclear power station.

Electric power, especially that created by nuclear power, is considered one of the mostimportant future energy resources because of limited fossil fuels and higher costs of oil.
Nuclear power stations are usually located at the seaside of a relatively sparsely
populated region, far from metropolitan areas, mainly because much clean water is74

Journal of Applied Input-Output Analysis, Vol. 3, 1996

Table 6: Effects on Production by Industrial Sector and Region
Including the Secondary Effects through Consumption
Share

of

InducedOutput(%)

Hokusei

Chusei

RestofMie

Rest of Japan

1)Agriculture, forestry and fishery

0.04

0.25

0.15

1.32

1.78

2)Mining

0.02

0.20

0.06

1.45

1.75

Sectors

Total3)Food production

0.16

0.32

0.03

2.80

3.32

4)Textile products

0.09

0.08

0.04

0.90

1.12

5)Pulp, paper and wooden products

0.06

0.12

0.10

1.51

1.81

6)Chemical products

0.36

0.01

0.03

1.97

2.38

7)Petroleum refinery and coal products

0.23

0.00

0.03

2.79

3.06

8)Ceramic, stone and clay products

0.71

1.66

0.41

2.24

5.04

9)Steel

0.07

0.02

0.00

3.51

3.60

10)Non-ferrous metal

0.08

0.00

0.00

0.46

0.54

ll)Metal products

0.17

0.46

0.03

1.11

1.78

12)General machinery

0.53

0.26

0.03

1.74

2.57

1.26

13)Electric machinery

0.01

0.11

0.02

1.10

14)Transportation equipment

0.19

0.11

0.02

1.06

1.38

15)Precision instruments

0.00

0.01

0.00

0.09

0.11

16)Miscellaneous manufacturing products

0.18

0.16

0.23

2.65

3.24

17)Construction

0.04

31.07

0.01

0.31

31.43

18)Electric power, gas and hot water supply

0.04

0.49

0.04

1.09

1.68

19)Water supply and sanitary services

0.02

0.19

0.01

0.21

0.44

20)Trade

0.30

1.58

0.21

3.99

6.10

21)Financial and insurance services

0.11

0.69

0.05

2.08

2.94

22)Real estate

0.23

0.90

0.09

1.82

3.05

23)Transport

0.74

1.82

0.13

2.50

5.21

24)Communication and broadcasting

0.02

0.31

0.03

0.55

0.93

25)Public administration

0.00

0.10

0.00

0.03

0.14

26)Education, research, medical services and health

0.22

2.52

0.11

1.53

4.40

27)Services

0.26

1.70

0.35

4.89

7.21

28)Office supplies

0.01

0.41

0.00

0.10

0.52

29)Activities not elsewhere classified

0.05

0.61

0.02

0.39

1.08

30)Total

5.07

46.25

2.36

46.32

100.0

Unit: Billion Yen

8.63

78.78

4.03

78.92

170.37required to operate them. Large amounts of time and money are required to construct a
nuclear power

station.

Many

subsidies,

however,areoffered topromotetheconstruction of such stations.

There is a plan to construct a nuclear power station with two plants of 1.35 million
Kw each in the Ashihama coastal region between the towns of Kisei and Nanto in the

Nansei area. Construction will start in the year 2000 and will take about five years.

The construction cost estimate is 999 billion yen4.
4 Plans may be delayed somewhat because more time will probably be necessary to get the agreementof residents.

An Interregional Input-Output Table of Mie Prefecture, Japan

75

Table 7: The Direct Effect of The Ashihama Nuclear Power Station
Unit: Billion Yen
Whole(Construction

PeriodPeriod2000-20192000 - 2004

Operational PeriodsiPeriod 1

Period 2

2005 - 20092010-2014

Period 3
2015-2019

Costs

of Construction

999.0

999.0

0.0

0.0

0.0

of Maintenance

449.5

0.0

149.8

149.8

149.8

42.2

19.2

17.0

2.9

2.9

Fixed Property Tax

94.2

0.0

49.6

27.8

16.8

Corporate Income Tax

94.5

0.0

31.5

31.5

31.5

Subsidies
Tax Revenues

Nuclear Fuel Tax
Total(100.0%)

19.2

0.0

9.1

5.0

5.0

1698.71018.3

257.2

217.0

206.0

(59.9%)(15.1%)(12.8%)(12.1%)

To evaluate the effect of the nuclear power station on regions and industries, we
compile an interregional input-output table, which has three regions and 84 sectors.
Here we define regions as the Nansei area, other areas in Mie Prefecture, and the restof the nation to lessen the computational burden.
Table 7 shows the direct effect of the power station during the construction andoperational periods. An operational period is considered as 15 years, because of thedepreciation of the nuclear energy stock. We divide this period into three periods offive years each.

Three factors are considered. The first is the expenditure on construction andmaintenance of the plant. It will cost 999 billion yen to construct the plant and 149.8
billion yen each five years for maintenance.

The second factor to be considered is subsidies. Most subsidies are used forinfrastructure such as roads, ports and public facilities. Some are directly paid toresidents and firms located in a certain neighborhood to lower their power costs. Suchsubsidies amount to 19.2 billion yen in the construction period, 17.0 billion yen for the

first five years of the operational period, and only 2.9 billion yen for the second andthird five years of the operational period.
The third factor is taxation. In the operational period, local government revenues

will increase due to rises in the fixed property tax, the corporate income tax and thenuclear energy tax. This will amount to 90.2 billion yen for the first five years of theoperational period, and 64.3 billion yen and 53.3 billion yen for each of the following

five years, respectively. The increase in tax income is expected to fall in the future.

Table 8 shows the overall effects relating to the power station5. In the construction
period, the direct effect is 1016.3 billion yen, while production increases by 3,140.8

5 Increased production includes the production induced by the increase of consumption demand as asecondary effect.

76

Journal of Applied Input-Output Analysis, Vol. 3, 1996

Table 8: The Economic Impact of the Ashihama Nuclear Power Station
Including the Secondary Effects through Consumption
Unit: Billion Yen
Whole

Construction

PeriodPeriod2000-20192000 - 2004

Operational Periods
Period 1

Period 2

2005 - 20092010-2014

Period 3
2015-2019

NanseiA) Costs, Subsidies & Taxes

563.5

310.5

112.4

75.7

64.7

B) Direct Effects

469.1

305.7

67.6

49.3

46.5

C) Effects on Production

527.2

325.6

85.8

59.9

55.9

D) Multiplier (=C/B* )

0.341

0.320

0.446

0.351

0.334

41.4

RestofMieA) Costs, Subsidies & Taxes

190.8

63.0

45.0

41.4

B) Direct Effects

120.5

63.5

19.8

18.6

18.6

C) Effects on Production

313.4

171.7

52.8

44.9

44.0

D) Multiplier (=C/B*)

0.203

0.169

0.274

0.263

0.263

Rest of JapanA) Costs, Subsidies & Taxes

944.2

644.8

99.8

99.8

99.8

B) Direct Effects t

955.1

647.0

104.2

102.1

101.8

C) Effects on Production

3989.32643.3

475.2

438.1

432.7

D) Multiplier (=C/B*)

2.579

2.601

2.466

2.567

2.585

206.0

Total

t

A) Costs, Subsidies & Taxes

1698.51018.3

257.2

217.0

B*) Direct Effects

1547.01016.3

192.6

170.7

167.4

C) Effects on Production

4830.43140.8

613.9

543.0

532.7

D) Multiplier (=C/B*)

3.122

3.090

3.186

3.181

3.182

The values include the import demands of Nansei and the rest of Mie.

billion yen as a whole, and the multiplier is therefore 3.09. However, about 84.2
percent of total production is related to that outside Mie Prefecture. The Nansei area
shares only 10.4 percent of the increase in production.

In the operational period, considerable amounts of money will be paid out as repair
costs, subsidies and taxes, which also have significant effects on the economy. These
will amount to 257.2 billion yen in the first five years of operation, which will decrease
to 206.0 billion yen in the third five-year period. The effects on production will alsochange from 613.9 billion yen to 532.7 billion yen. However, the multiplier is almost

the same for all periods, at 3.18.
Production in the Nansei area will increase by 325.6 billion yen in the construction

period, which means about 4.8 percent increase per year in terms of the output in 1985,

which was 1,346.6 billion yen. However, this amount will decrease to 85.8 billion yen

in the first operational period, and in the third operational period it will be 55.9 billion
yen. The effect on production in this area changes from about 1.3 percent to 0.8
percent of the output in the Nansei area. Thus the impact on this area will beconsiderably larger in the construction period, but the stimulus will lessen in theoperational period.
Table 9 shows the effects on the industries in each region, the values of which are

An Interregional Input-Output Table of Mie Prefecture, Japan

77

Table 9: Effects on the Regional Economies: The Whole Period
Share of Induced Output

Sectors

NanseiRest of Mie

Rest of Japan

1 )Agriculture, forestry and fishery

0.05

0.07

1.42

1.53

2)Mining

0.01

0.04

0.43

0.47

3)Food production

0.04

0.13

3.24

3.41

4)Textile products

0.01

0.07

1.15

1.22

5)Pulp, paper and wooden products

0.01

0.08

1.53

1.62

6)Chemical products

0.01

0.16

2.07

2.24

7)Petroleum refinery and coal products

0.00

0.09

2.04

2.14

8)Ceramic, stone and clay products

0.06

0.23

1.25

1.54

9)Steel

0.01

0.12

5.71

5.83

10)Non-ferrous metal

0.01

0.10

1.47

1.58

ll)Metal products

0.06

0.30

2.40

2.77

12)General machinery

0.15

1.13

13.62

14.90

13)Electric machinery

0.16

0.82

10.40

11.38

14)Transportation equipment

0.02

0.11

1.35

1.48

15)Precision instruments

0.00

0.01

0.15

0.16

16)Miscellaneous manufacturing products

0.04

0.10

2.83

2.97

17)Construction

9.37

0.57

0.51

10.46

18)Electric power, gas and hot water supply

0.02

0.11

1.94

2.08

19)Water supply and sanitary services

0.02

0.03

0.36

0.41

20)Trade

0.15

0.36

5.88

6.39

21 )Financial and insurance services

0.05

0.17

3.03

3.25

22)Real estate

0.09

0.24

3.31

3.64

23)Transport

0.10

0.36

3.43

3.90

24)Communication and broadcasting

0.02

0.07

1.07

1.17

25)Public administration

0.01

0.01

0.07

0.09
3.76

26)Education, research, medical services and health

0.23

0.39

3.13

27)Services

0.21

0.49

7.69

8.39

28)Office supplies

0.00

0.01

0.18

0.20

29)Activities not elsewhere classified

0.03

0.09

0.91

1.03

30)Total

10.92

6.49

82.59

100.00527.4

313.603989.40

4830.50

Unit: Billion Yen

(%)

Total

estimates for the whole period. More than 80 percent of the increased production

appears outside the prefecture, which suggests that the construction of the power plantshould be of national concern. Almost all of the equipment in the power station will be
brought from outside the prefecture.

Only 10 percent of the increased production is related to the region where the plant
will be constructed, the Nansei area. However, this is large enough for such a small
region. A 527.4 billion yen increase over 20 years means about 2 percent increase per

year, when compared to total output in 1985. The effect in the Nansei area isconcentrated in the construction sector, which is 9.37 percent of total production. Only

1.55 percent of the total production increase is in the other sectors. On the other hand,
6.49 percent of the total production increase appears in the rest of Mie Prefecture. In

78

Journal of Applied Input-Output Analysis, Vol. 3, 1996

Mie Prefecture, the Nansei area can't share in the effects as much as the other areas,
because industries are mainly located in the northern part of the prefecture.

5. Concluding Remarks
In this paper, we estimated an interregional input-output table of Mie Prefecture for1985. There are five subregions in the table. Using this table and a national input-

output table of the same year, we compiled a nation-wide interregional input-output
table. And we showed two applications: one to evaluate the effect of public investment
by a regional government, Tsu City, and the other to evaluate the effect of a nuclear
power station planned in the Nansei area. The regional aggregation was done forcomputational simplicity with somewhat different definitions of regions for both cases,
whereas the input-output models are the same for both applications.
A prefectural economy such as that of Mie Prefecture is open to the extent that
commodity flows to and from the outside of the prefecture are large compared to thescale of the economy. In the case of increased public investment in the Chusei area, themultiplier is 3.069 for output as a whole, 1.419 for output in the Chusei area, and1.422 for outside the prefecture. Thus about half of the increased production leaks out.

This suggests the importance firstly of evaluating the total effect of public investmentusing a national-wide interregional input-output table, and secondly of evaluating theeffects on each region.

In the Chusei area, the construction sector gains the largest portion of the effects
and the service sector follows, but the gain of the manufacturing sector related to thatof construction sector is not so large. Outside the prefecture, the manufacturing sector
gains a relatively large portion of the effects.

In the case of the construction of a nuclear power station, the gain of the region inquestion is very low, because there are few industries able to support the construction.

Even though the effect on the region is only 10 percent of the whole, this still has aconsiderable impact on its economy especially in the construction sector. In Mie
Prefecture, the gain will be only 17 percent of the whole production. Thus more than
80 percent of the entire effect of the construction of a nuclear power station willappear in outside the prefecture, which is a remarkable characteristic.
Usually we have limited information of commodity flows within a prefecture,

which makes it difficult to estimate an interregional input-output table. In Mie
Prefecture, fortunately, we have such information as sampling surveys, which we used.

The necessity to use such interregional input-output table of the prefecture requires
more systematic and continuous statistical surveys on commodity flows within theprefecture.

References[1]

Tsubouchi, T. (1991), "Interregional 1-0 Table of Ehime Prefecture" (in Japanese),Innovation & 1-0 Technique, Vol. 2, No. 1, pp. 35-42, Pan Pacific Association of

An Interregional Input-Output Table of Mie Prefecture, Japan

79

Input-Output Studies, Tokyo.

[2]

Takahata, Y. (1992), "Interregional 1-0 Table of Hokkaido Prefecture" (in Japanese),Innovation & 1-0 Technique, Vol. 3, No. 3, pp. 24-29, Pan Pacific Association of

Input-Output Studies, Tokyo.

[3]

Yamada, M. (1994), "An Estimation of Mie Prefecture's Interregional 1-0 Table" (inJapanese), Innovation & 1-0 Technique, Vol.

5, No. 4, pp.

52-67, Pan Pacific

Association of Input-Output Studies, Tokyo.

[4]

Yamada, M, M. Ito, and H. Mizota (1995), "On Economic Impact of Public Investment
in Tsu City" (in Japanese), Research Report No. 3, Mie University Cooperative
Research Center, pp. 23-30.

[5]

Yamada, M. and T. Ito (1995), "The Effect of the Power Generation Station on the

Regional Economy" (in Japanese), Discussion Paper No. 9501, Mie University, Facultyof Humanities and Social Sciences.