Journd of the National Institute of Public Health 2010 Vol. 59 No. 1 p.31−42

Topic：Health Care System as Social Common Capital〈Review〉
Significance and Issues of Measuring the Benefit of Community
Medical Service System by the Hedonic Price Method
Takuma SUGAHARANational Institute of Public Health Department of Management Sciences

Abstract
Objectives: The purpose of this study was to focus on the “external effect” recognized as “security” or “peace of mind” ofregional residents around medical facilities and to estimate it statistically by applying the Hedonic Approach to regional data on
Kobe City.
Methods: Open data source on the public announcements of land price（Chika-Koji）was utilized to collect regional land-pricedata. Plural geographical information systems（GIS）were also utilized for the collection of data on the characteristics of social
infrastructure and so on. In addition, information of regional medical systems was collected from public data sources managed
by the “Medical Association of Kobe City”. On gathering this information, the total volume of data consisted of 317 samples.
Based on the hedonic- approach, the estimation model was constructed to regress land prices by various characteristics
including the status of the regional medical service system. Finally, we discuss problems revealed by the analysis and the way
to reflect these values to real policy.
Results: The results clearly show that not only does a strong correlation exist between land price and the number of medical
facilities within 1kilometer of a given point（p<0.01）,but a negative correlation also exists between land price and the distanceof the nearest medical facilities from a given point（p<0.01）. The results also suggested that land price was increased
marginally by adding the number of health care facilities near a given land point. Conversely, land prices tended to drop by
prolonging the distance from the nearest healthcare facilities. Our estimation results also suggested that the coefficients ofexternal effect, which reflected the benefit from the security residents felt from health service accessibility, was no less thanthat of other important characteristics related to infrastructure or convenience of daily life.
Conclusion: To summarize, health care facilities contribute to regional society by their existence as a supplier of a sense of
security to neighborhoods. We should re-evaluate this aspect regarding benefit and reflect this in the planning of regional
medical system as social common capital.
keywords: regional medical system, external effect, hedonic-approach, social common capital, sense of security（accepted for publication, 22nd Feb. 2010）

down or removed, and there is insufficient capacity of

Ⅰ．Introduction

maternity divisions, pediatric divisions and emergency care

It is a well known issue that community medical service

services. It is not simple or easy to organize the causes ofdelivery systems are said to be underfunded andthe problems within medical service delivery systems,

collapsing; the lack of medical doctors and nurses insince all cases have different local endemic contexts andmedical institutions is developing into a serious problem,

original conditions. This report perceives an issue of value

more and more local medical institutions are being closed

brought about by medical service delivery systems for

2-3-6 Minami, Wako-shi, Saitama, 351-0197 Japan.
FAX：+81-48-468-7985
E-Mail：sugahara@niph.go.jp

J. Natl. Inst. Public Health, 59（1）: 201031

Measuring the Benefit of Community Medical Service System by the Hedonic Price Method

which evaluation is insufficiently discussed or organized asinclusive of social expense, which is air pollution.

a factor in the cause of these situations. Our purpose is to

Therefore, it means its operating level is too high above thebriefly describe the Hedonic Price Method and theappropriate level, which is set from the social point of view.

significance of its application for evaluating community

On the contrary, development of parks and greeneries inmedical service delivery systems, and to highlight actual

neighboring residential areas offers improvement ofissues in its application by showing measurement examples

landscape,of Kobe-City.

neighboring residents. But when seen from the purpose of

which

consequently

creates

comfortforFirstly, what is the value of the community medical

an economic entity, social benefit, which is a positive

service delivery system and how are we to understand it?

external effect, is not fully reflected on the decision of the

The values which community medical service delivery

operating level（QF: Fig. 1）, thus too low from thesystem brings about can be summarized into two areas asappropriate level set from the social point of view（QE:follows; 1）value that patients and visitors can benefit from;

Fig. 1）. This case creating such external effect is also a

for example, health recovery and health maintenance“market failure” in the sense that most appropriate level issupported by healthcare services like medical check ups,

not achieved.

and medical services such as treatment for disease andAs for the development of a community medical service

injury, 2）value that is a “sense of security” for healthy local

delivery system, it can be considered that a similar positive

residents, brought about by the existence of a proper

external effect has occurred through the provision of a

medical service delivery system in a community. The“sense of security” for local residents. However, in theformer can be referred to as “utility value” and the latter asprocess of having developed the medical service delivery“existence value”.

systems in our country, there was no explicit discussion

These two values related to the medical service delivery

about the evaluation of values such as these, which are ansystem are regarded as difficult to evaluate for different“external effect”. Considering that past investigations１）

reasons. The main reasons that make the evaluation ofindicated

health care and medical services, such as health check-ups

neighborhood” as the most common answer to “whatand treatments, in market difficult are; the existence oftroubles or anxiety do you have in your life?”, the“asymmetry of information”, that is, a gap of knowledge andcommunity medical service delivery system which doesn’t

information between patients/visitors and medical staff that

explicitly consider any social benefit such as “sense of

can’t be ignored, and the existence of “uncertainty” that

security” of local residents, is possibly at a level lower than

individual diseases are unique in themselves and even if

what is an appropriate social level. Moreover, recent

same treatment is administered to same disease, its effectdevelopments such as the closing down of local medical

and recovery process are not consistent through individuals.

institutions and the removal of clinical departments means

Both “asymmetry of information” and “uncertainty” are athat local residents lose a positive external effect whichthe“unavailabilityofahospitalrequired condition for “market failure”, thus the evaluations
in market are difficult.
With respect to the latter, when people live in an area
where the necessary medical service delivery system isavailable, healthy people can also have a “sense of security”
knowing it is there if they need it. This value is considered
to be “a positive external effect” which a community
medical service delivery system can create, if put into thecontext of economics.
External effect is such that activities of one economic
entity affect another economic entity outside market
activities. For example, if a factory emits sooty smoke
because of its operation, making the environment of
peripheral residents deteriorated, it’s an example of“negative external effect”. When the owner of the factory
neglects paying enough attentions to the peripheral
environment based on his selfish motive with regard to theoperation of his factory, the cost curve of the company isn’t

32

Fig. 1 . Positive Externality

J. Natl. Inst. Public Health, 59（1）: 2010

in

the

Takuma SUGAHARA

they have benefited from up until now, suggesting afor the local residents are not taken into consideration.

possibility that the gap from the most appropriate level may

Therefore, in order to discuss benefits of medical service

be increasing.

delivery system from the point of view of “the entire

Regarding the reason that community medical services

society”, it is necessary to evaluate the areas which are yet

have become underfunded, it can be considered that there

to be evaluated. This chapter briefly explains the Hedonic

hasn’t been enough discussion about the value that thePrice Method, which is utilized as an approach to measurecommunity medical service delivery system creates, failingsuch external effects and the quality of environments.

to raise methods or results that would have clarified them.

The Hedonic Price Method is a general approach that

Consequently, there has been a failure to show sufficientconsiders the entire value of assets and services as aevidence that would have convinced local residents about“bundle of attributes”, and evaluates the values of thesethe development of the community medical service system,

attributes by allocating a price to each attribute. The

and in addition, there has been insufficient investment

bundling of attributes, which are assets and services, iscorresponding to that value. Collapse of community

widely used in the case where they are bought and sold on

medical service delivery systems not only creates trouble

a market using a price, but their values cannot be evaluatedfor on-going treatment of patients, but also threatens thesince there aren’t any individual markets for individual

peaceful life of the local people depriving them of a “sense

attributes. Therefore, in this method, assets and servicesof security”. In this report, based on such an understandingthat are identified as the same, have homogeneous factors

with regard to the value of the “sense of security”

even if they are presented as different, which means there（existence value）brought about by community medical

is a premise of understanding that they have a common

service delivery systems, which is yet to be explicitly

price structure. The applicability of this method is wide. For

discussed, we’ll use actual examples of the Hedonic Priceexample, it is used for making adjusted price indexes which

Method of Kobe-City, widely used as a method to measureconsider influences of technology progress in products thatthe “external effect”. This report consists of the following.

change over time. However, here I shall limit the subject ofChapter Ⅱ briefly describes the abstract of the Hedonic

the measurement method to the values of external effects

Price Method. Chapter Ⅲ shows the results of measurements

created by a community environment.

made in Kobe-City, and a comparison is made between the

When people choose a place of work or living, they takevalue of benefits created by the medical service delivery

the surrounding environment into consideration. Under thesystem and that of other social benefits. Chapter Ⅳ is partly

circumstance that freedom of movement is guaranteed,

based

of

they make their preferred choice after comparing land

Yokohama-City and the measurements conducted in Kobe-

prices, rent and various related factors. Land is limited, so

City, with description of several issues discussed during theprices go up if there is large demand, and vice versa. In

on

the

already

publicizedmeasurements

measurement process. Chapter Ⅴ raises issues regarding

other words, there is no market for those related items on

the application of this evaluation for future policies. Chapter

an individual basis（for example, availability of medical

Ⅵ contains the conclusion.

institutions,

Ⅱ．The Hedonic Price Method as an approachto the measurement of external effects

open

spacesandparks,

educational

environment, etc.）, but the price of land and rental houses,
which are the result of a bundling of factors, are decided in
the market. The Hedonic Price Method tries to determine

It is difficult to evaluate the value which community

the values which people give to individual surrounding

medical service delivery systems create, particularly its

items by focusing on the relation between price and theexistence value for local residents on a market basis. For

environment. Japanese are considered to have a strong

example, suppose a medical institution in a community is toattachment to land originally, and the “myth” that it isbe acquired by another institution. In this case, in order toalways safe to invest in land persisted until the bubble

decide the buyout price, a profitability evaluation would be

economy burst. Demand for land and people’s interest in

made, including the current number of patients, thethe surrounding environment of the land, are generally

utilization ratio of beds, future business potential as well as

strong. In order for the Hedonic Price Method to bea strict evaluation of its assets including equipment inside

effective, there has to be demand for land, and consumers

the facility. However, the values that are evaluated in such a

have to perceive a difference in the quality of different

scenario are limited to the values that belong to the medical

environments, so it can be said that the method is

institution as an enterprise, and patient benefits fromconsistent with conditions in Japan.

treatment and the external effect that its existence provides

As for the influences on local areas through the

J. Natl. Inst. Public Health, 59（1）: 201033

Measuring the Benefit of Community Medical Service System by the Hedonic Price Method

development of infrastructure and surrounding areas, they
are indicated as being totally reflected in real-estate prices
when satisfying the following conditions;（1）open area,（2）small area,（3）homogeneity of consumers,（4）free entry,（5）sound pricing. This hypothesis is usually known as the“capitalization hypothesis”. This means that all changes inU（Z, I−c（Z））＝u＊（3）

Also, this bid function can be defined at any utility level,so formula（4）can be set.
U
（Z, I−c（Z; I, u））≡u（4）

local resident benefits caused by changes in the surrounding

Suppose consumer behavior is such that maximize theenvironment are included in land prices２）, and based on

utility, and a bid function ci is the value c differentiated withsuch an understanding, ultimately the Hedonic Pricerespect to zi, this ci coincides with the marginal rate of

Method is the same as analyzing the social benefits,

substitution of specific attributes of land（i）and all thealthough it appears to be analyzing land prices.

composite commodities of assets and service X. After all, aUnder the conditions mentioned above, if we analyze land
prices inclusive of entire social benefits by applying thebid price, which consumers’ willingness to pay is reflected
on, and a market price coincide.

Hedonic Price Method to get the values of individual

Also, the market land price function seen from consumers

attributes, what kind of theoretical meaning does each（Formula（1））means the minimum price that they have to３）
have? Rosen（1974）
gave a theoretical foundation to thispay when they want to obtain certain attributes. So, whenpoint. A detailed explanation including a complicatedwe hypothesize the existence of homogeneous consumers,

formula is to be omitted here since they’re described in

the market land price function and the bid function

４）

preceding research , so only its framework is describedcoincide, and when there are heterogeneous consumers,

here.

the Hedonic land price function becomes the envelop of the

Various attributes related to land can be expressed as abid function５）. It is the theoretical conclusion that market

characteristic vector Z＝（z1, z2, z3, …, zn）. These various

land price function is a market equilibrium curve that

attributes include accessibility to public transportation,satisfies supply-demand balance in the case where various

convenienceneighboring

environmental attributes including community medical

educational and natural environment, etc. In the market,

service delivery system are dealt with in a virtual market,

land prices are decided according to their attributes, so thewhich does not exist in reality. The biggest advantage offormula to express the relation between land price andthis method is being able to fictitiously measure market

various attributes are（1）.

prices in a virtual market, such as the sense of security

of

local

medicalservices,p（Z）＝p（z1, z2, z3, …, zn）（1）

created by a medical service delivery system.
Following on from that described above, consumer

Next, let’s think about consumer behavior. Consumers

evaluation of individual attributes of land should normallypurchase land with various attributes and all the composite

be made based on the direct estimation of bid function. In

commodities but the land（X）, under the constraints of theirFig. 2, even if the value of bid function c1 rises from p1 to p2

income. When the utility function of a consumer is U＝（Z,X）and the income is I, the maximum utility under theconstraint of income is（2）.
max U＝（Z, X）
z（2）

s.t. I＝X＋p（Z）
The behavior of the consumer is expressed by
maximizing X and Z under this constraint. If it is X＊, Z＊,
then this is the amount of his purchase, and his level ofutility is decided depending on this. Defining a function
with c（Z）that satisfies required conditions to achieve theutility level u＊, it is possible to define a bid function whichindicates the maximum price that they are willingly to pay
for obtaining land Z with various attributes（z1, z2, z3, …, zn）
while maintaining the utility level.（Formula（3））
Fig. 2 . Bid Function and Market Land Price Function

34

J. Natl. Inst. Public Health, 59（1）: 2010

Takuma SUGAHARA

when certain environmental quality is improved from z1 to

Annual national land price survey（Chika-Koji）in 2007

z2, this is movement on c1, so even if there is an additional（Japanese Yen/m2）

payment of p2-p1 because of this improvement, the utilities２）Space of the land（m2）of consumers stay constant. Therefore, from this it is３）Price of floor space（%）/ Rate of occupancy（%）

possible to construe that p2-p1 is the willingness to pay for４）Information of connecting road:the environmental change from z1 to z2. Strictly speaking,width of road（m）/ Ownership of road（Public: 1,

as you can see from the form of each function indicated in

Private: 0）/ existence of other connecting road（exist:

this figure, the market land price function does not coincide

1, not exist: 0）

with bid function, and evaluation using the market land
price function to make p3-p1＞p2-p1 usually becomes toolarge. But in reality, it is difficult to identify and estimate bid５）Gas pipeline（exist: 1, not exist: 0）/Sewerage（exist: 1,
not exist: 0）６）Regulated land criteria for use:functions, and in many cases, it is necessary to hypothesize

first criteria for residence/ second criteria forhomogeneity of consumers or to set a hypothesis that theresidence / first criteria specialized for lower residence

gap between bid function and market land price function is/ second criteria specialized for lower residence / firstsmall since the influence of environmental change is acriteria specialized for middle-higher residence /minor one, in order to obtain the value of the environmental

second criteria specialized for middle-higher residencechange through the use of market land price function,/ criteria for commercialized areas（falling into

which makes it easier to make an estimation.

category: 1, not : 0）

Ⅲ．Evaluation of community medical service
system in Kobe-City

７）Quasi fire prevention area:
city planning legal regulations（falling into category: 1,
not: 0）In this chapter, the abstract on the evaluation of thecommunity medical service delivery system in Kobe-City is

Medical system availability around land point

described using actual examples of the analysis discussed

１）the number of medical facilities within 1 kilometer:

so far.

（Physician, Pediatrician, Obstetrics, Surgery,
Otolaryngology, Dermatology, Orthopedics）
２）distance to the nearest medical facilities:（1）Subject data
Kobe-City in Hyogo Prefecture, a government decreed（Physician, Pediatrician, Obstetrics, Surgery,city, was the subject for the analysis. With regard to

Otolaryngology, Dermatology, Orthopedics）

information related to official land prices and land-pricepoints, information on the official land prices of 2007 wasConvenience of daily life and other social infrastructure

obtained by specifying the “residential zone” from the areas

１）distance to the nearest station from the land point

covered in the “Information of Land Integrated System” in２）accessibility to the central area of Kansai“Land and Real Property in Japan” run by the Ministry oftime from the nearest station to Osaka station, theLand, Infrastructure, Transport and Tourism. Information

number of transportation changes, total cost of accesson medical institutions in surrounding areas was obtained
from the “Medical Institution Information System” run by
Kobe Medical Association. Information on convenience ofto Osaka station
３）distance to the nearest kindergarten ,primary schooland junior high school

living and social infrastructure in the area in question was４）distance to the main head office of each ward

collected from several free map retrieval internet sites by５）distance to the nearest shopping store

the author as an individual, non-profitable entity and data

６）distance to the nearest post officeentered. Regarding information on income circumstances

７）distance to the nearest large park or green fieldin the area, information was collected from the “JapaneseHigh-income tax payer database” operated and published

Regional characteristics

by a limited private company, Sogo Houmu Hosho（General

１）the number of households by regional community

Legal Work Security）which uses non-personal information

２）the population of each regional communityand shows the amount of tax paid at a “town” level.

３）the population ratio of over 65 year olds in eachthe number of persons in high income tax bracket byCharacteristics of land point

regional community

１）Land price:

J. Natl. Inst. Public Health, 59（1）: 201035

Measuring the Benefit of Community Medical Service System by the Hedonic Price Method

shown from Table1 to Table4. Moreover, Table5 shows the（2）Basic amount of statistics of data set.

correlation between land price and regional health status

After collection of this information, the total sample

variables.

number for analysis was 317. These basic statistics are

Table 1 Descriptive Statistics（1）.
Frequency
Characteristics of Land Points
Land Price in 2007
Space of the Land（m2）Rate of floor space（%）
Rate of capacity（%）
Width of connecting road（m）
Ownership of connecting road（Public: 1 Privte: 0）
Gas pipeline（avail: 1 not avail: 0）
Sewerage（avail: 1 not avail: 0）

Min

317
317
317
317
317
313
317
317

36400
51
40
80
2
0
0
1

Max

Average

Std.Dev

430000
798
60
300
20
1
1
1

143652.05
186.1754.29
151.51
5.95
0.92
0.95
1

75074.47
89.51
7.33
56.81
2.08
0.27
0.23
0

Max

Average
12.42
5.06
1.37
4.77
1.82
2.62
4.04
307.78440.98995.76466.38830.20764.10553.14

Std.Dev
10.96
3.66
1.65
4.06
1.82
2.78
3.61
233.42358.64740.41358.25655.93614.27441.63

Table 2 Descriptive Statistics（2）.
Medical system availability around the Land Point
No.of physicians within 1km
No. of pediatricians within 1km
No. of obstetrics within 1km
No. of surgery within 1km
No. of otolaryngology within 1km
No. of dermatology within 1km
No. of orthopedics within 1km
Distance to nearest physician
Distance to nearest pediatrician
Distance to nearest obstetrics
Distance to nearest surgery
Distance to nearest otolaryngology
Distance to nearest dermatology
Distance to nearest orthopedics

Frequency
317
317
317
317
317
317
317
317
317
307
317
317
310
317

Min
0
0
0
0
0
0
0
14
25
0
35
45
7
58

53
18
9
20
8
13
19
2189
3461
3870
4150
4212
4322
4150

Table 3 Descriptive Statistics（3）.
Daily life convenience and Other social Infrastructure availability
Distance to nearest station
Time from nearest station to Osaka station
Time of transit to Osaka station
Total fare to Osaka station
Distance to nearest kindergarten
Distance to nearest primary school
Distance to nearest junior high school
Distance to main head office of each ward
Distance to nearest shopping store
Distance to nearest post office
Distance to nearest large park or green field

Frequency
317
317
317
317
317
317
317
317
317
317
289

Min
100
21
0
270
16
57
55
185
47
47
127

Max
6300
81
3
1290
1300
1300
2100
27800
2700
1700
3700

Average1375.1146.66
1.08
740.69308.64396.49597.293253.72503.06420.901465.22

Std.Dev
1165.56
10.84
0.59
256.77218.39226.76
310.684274.40
340.41295.40768.90

Min

Max
6634
15846
0.67
32

Average493.821122.76
0.25
4.73

Std.Dev
837.17
1989.01
0.08
6.74

Table 4 Descriptive Statistics（4）.
Regional Characteristics
No. of households by regional community
Total population of each regional community
Population ratio of over 65y.oin each regional community
No. of people high income tax bracket by each regional community

36

Frequency
317
317
317
202

J. Natl. Inst. Public Health, 59（1）: 2010

1
3
0.05
1

Takuma SUGAHARA

In this equation, pi means land price（Yen/m2）, a is（3）Specification of function form
In this paper, we specified an estimation of function form
using the following simple linear form.

intercept, Lki is characteristics of the land, Hsi is status of
the regional health care system, Iji is various characteristics
related to the land point including social infrastructure,

K

S

J

k＝1

s＝1

j＝1

pi ==＋∑ >kLki＋∑ ?sHsi＋∑ @jIji＋Bjdaily convenience and regional status such as the income
level of the community. bk, cs, dj are estimated coefficientsof characteristics respectively and fi is a statistical error
term for presuming normal distribution.

Table 5 Correlation between Land Price and Regional HealthCare System.
Land Price inKobe in 2007
No. of physician within 1km
No. of pediatrician within 1km
No. of obstetrics within 1km
No. of surgery within 1km
No. of otolaryngology within 1km
No. of dermatology within 1km
No. of orthopedics within 1km
Distance to nearest physician
Distance to nearest pediatrician
Distance to nearest obstetrics
Distance to nearest surgery
Distance to nearest otolaryngology
Distance to nearest dermatology
Distance to nearest orthopedics
This number is pearson’s correlation＊＊
1% statistically significant.720＊＊.628＊＊.606＊＊.698＊＊.568＊＊.681＊＊.576＊＊−.376＊＊−.333＊＊−.505＊＊−.320＊＊−.503＊＊−.484＊＊−.356＊＊（4）Estimated results of land price function
Fig. 3 is the summary of the estimated values related tocommunity medical service delivery systems obtained
through the estimated results of the land price function.
Each of them is shown as the estimated land price for 1m2.
Considering that the average land price in Kobe-City was
144,000 yen, these estimated values of individual clinicaldepartments are about 4-5% of land price. Also, Fig. 4 shows
a comparison with other surrounding attributes with regard
to the influence of extending the distance from the landprice point over the estimated values. As far as the above
mentioned shows, the evaluation of the local residents of
the availability of community medical service delivery
systems is at a noticeable level when compared with othersurrounding attributes and convenience.

Fig. 3 . Result of Estimation（1）J. Natl. Inst. Public Health, 59（1）: 201037

Measuring the Benefit of Community Medical Service System by the Hedonic Price Method

Fig. 4 . Result of Estimation（2）Ⅳ．Actual issues for evaluating the community
medical service system by the Hedonic
Price Method

are examples.
① “Market price”
It is possible to collect this from the “General Information
System on Land” linked to the “Information of LandFor local residents, the conditions of the community

Integrated System” operated by the Ministry of Land,

medical service delivery system should appear to be a

Infrastructure, Transport and Tourism. When the level

difference in the quality of the environment of thesuch as prefecture, city, town or zone is specified, market

communities. Therefore, by collecting information on

data in any specific area of Japan can be obtained. It is also

community medical service delivery systems together withpossible to retrieve the information by business content

other aspects related to the surrounding environment, andsuch as market period（quarterly）or kind of land by

examining the relationship between that information andspecifying the method of retrieval, thus yielding a highland prices in the area, it is possible to estimate the value

retrieval performance. It is possible to obtain information

which local residents give to the existence of community

on land attributes such as square footage, shape, distance

medical service delivery systems, namely, the price whichfrom the nearest train station, width of the road in front,

they are willing to pay. Here, the issues which needspecified use, housing per hectare and plot ratio. These areconsideration for making an analysis with the Hedonic

actual market prices so they are supposed to be the mostPrice Method are discussed by separating them into issues

appropriate information for estimating a bid function.

of data and issues for making estimations.

However, in actual use the following issues are encountered.
1）It is not openly publicized so address cannot be＜Issues of data: ＞

identified. Therefore it is not possible to precisely connect a（1）Selection of land priceland price to the surrounding environment. 2）It is possible

When estimating a bid function by the Hedonic Pricethat the prices are decided according to the personal

Method, we need to consider which land price to use whenreasons of buyers rather than sellers. 3）The market timing

there is more than one price available to use. The followingof the collected information is not at a specific point in time,

38

J. Natl. Inst. Public Health, 59（1）: 2010

Takuma SUGAHARA

so it is necessary to adjust the prices by substantiating

publication of information by purpose have progressed, andthem.

the relationship between market price and individual land

② Official land priceprice are mostly clarified. Ideally, it is preferable to use

Similar to market price, it is possible to collect thismarket prices, but considering the connection with theinformation from the “Official Land Price” linked to thesurrounding attributes, under the current situation, it is“Information of Land Integrated System” run by thehighly convenient to use official land prices that can be

Ministry of Land, Infrastructure, Transport and Tourism.

identified by address.

Data after 1970 in any specific area of Japan can be（2）Data of community medical service institutions

obtained by specifying a level such as prefecture andWhen evaluating community medical service delivery

municipality. Official land price indicates the “normal price”

systems, it is essential to obtain complete information about

in the market exclusive of any speculative element ofcommunity medical service institutions. There is highthe land. And, “standard land” in any area, which

demand from local residents for such kind of information,satisfies “representativeness”, “moderation”, “stability” andand many homepages of public administrations publish“certainty”, are appraised by two or more real-estatesuch information. Some of them have such high searchingappraisers using any necessary adjustments. It is possible

capabilities that it is possible to search the nearest medical

to obtain information related to land attributes similar

institutions from home by specifying a clinical department.

to those of “market price” as well as to specify

For example, at the homepage run by the Headquarter for

address. This has the advantage that it is possible to make a

the Promotion of Medical Institutions

precise connection with information on the surrounding

Yokohama-City, it is possible to search using conditions

environment and it can exclude influences caused bysuch as details of medical service or by location such as the

speculative elements, which do not reflect reality. On theuser s own location and obtain results grouped by distance.

other hand, however, it is necessary to note that this is the

As far as the author could verify, Sapporo-City, Kobe-City

appraisal price of real-estate appraisers not the actualand Fukuoka-City have similar systems for searchingmarket price.

medicalinstitutions,althoughnot

Cooperation ofasadvancedas③ “Prefectural land price research: standard land price”

Yokohama. In areas such as these, it is relatively easy toThis announced each year by the Prefectural Governor

obtain information on what kinds of medical service

based on appraisals made by one or more real-estatedelivery systems exist as features of these communities.

appraisers. The publicized information of attributes

However, in many local governments, information on

conform to the official land price, having common land-community medical service delivery systems including

price points, and the price is a “standard price” Therefore,clinics, is not easy to obtain for all people. Above all,the points to note are the same as those of the official land

accuracy, speed and coverage of information are hardly

price.

ensured. This may be the most serious issue for making an④ “Real-estate tax appraisal and asset appraisal standard

actual analysis using the Hedonic Price Method.

for roadside land prices”
Each of these is an appraisal value for imposing
inheritance taxes, gift taxes, or taxes on real-estate, etc.

＜Theoretical issues and issues for making estimations＞（1）
Selection of function

With regard to the real-estate tax appraisal, it is conducted

In the Hedonic Price Method, there is no transcendental

based on about 70 percent of the official land price, andtheoretical constraint for the function types of market land

about 80 percent of the asset appraisal standard forprice function. Put differently, it is possible to specify theroadside land prices. For the real-estate tax appraisal, thefunction type at any estimated time from a particular point

appraised prices of a standard year remain unchanged forof view. Therefore, it is always necessary to be conscious of

three years in principal, but roadside land prices arearbitrariness of settings. Hidano（1997）６）, however, points

renewed every year. Appraisal methods for both have manyout that this is not a big issue as long as the given subject ispoints in common, and they indicate the prices of one sq.

within the range of existing environmental standard or

meter of standard housing land facing a road. It is possible

development standard of social infrastructure. Above all,to collect research data from all over Japan, however, there

obtaining values near an average level will not affect theis a problem that making a precise connection withresult. Conversely, when evaluating individual attributes

surrounding areas becomes difficult because identicallyrather than near-average values, it is necessary to discuss

appraised areas become smaller since they are appraised bysuch specification much more strictly. In the specification,

road. As indicated from the above, the organization andthe following points are usually considered; 1）suitability of

J. Natl. Inst. Public Health, 59（1）: 201039

Measuring the Benefit of Community Medical Service System by the Hedonic Price Method

the estimation formula, 2）theoretical consistency of theestimation parameters, 3）simplicity of the estimation work,4）simplicity for understanding the results of estimations７）.
（2）Issues of endogeneity and simultaneous decisions

Ⅴ．Suggestion for the re-construction ofcommunity medical service system as asocial common capital

Endogeneity of explanatory variables that are applied in

I perceive community medical service delivery system as

relation to the specification of market land price functions

a social common capital９） with Commons-like character１０）

becomes an issue. This is particularly true for “the number

for the following reasons. A community medical serviceof medical institutions” which exist in peripheral areas as andelivery systems is a 1）common asset which is accessible

environmental attribute of the medical service delivery（free access）for anybody in principal, 2）has become run-system. If a phenomenon is observed where for somedown due to surplus consumption of patients and theirreason more medical institutions enter an area where landfamilies with selfish motives, 3）the adverse affects fromis expensive making that area full of them, or to the

becoming run-down is affecting not only existing visitors

contrary, more institutions in an inexpensive area making

but all residents in an area including potential visitors, 4）that area full of them, this means that the land price itself isdifficulty for restoring to its original state（irreversibility）

an influencing factor for the decision of the number ofafter becoming run-down. In order to avoid a “Tragedy of

institutions, and “the number of medical institutions” given

Commons” of community medical service, what kind ofas an exogeneous variable does not satisfy the hypothesis ofcountermeasures can we take to reflect the aforementioned

independency from land prices. It is a general understanding

values of external effects to reality? Lastly, let s touch uponthat the location of public medical institutions are decided

the issues for reflecting such values in actual policies.

by conditions of communities regardless of land prices. On

There are two main ways to solve the influence of thethe other hand, with regard to private medical institutions

external effect; 1）private solution, 2）public solution. In

and clinics in particular, it is not transcendentally clarified

private solution, there is a “change of allocated ownership”

whether the level of land prices affects their entry or not.

and “solution by negotiation”.

As for the eighteen wards of Yokohama-City which I have８）

Let s start with a “change of allocated ownership”. Whenpreviously researched , the relationship between thethere is an external effect, its influence can be solved bynumber of hospitals and clinics and their increase/decrease,enlarging the economic unit in question and integrating it

and the level of land prices was examined, suggesting no

into a unified unit, the influence can then be solved bysignificant statistical relationship between them. However,being adjusted within the same economic unit. This is toin other areas, it is highly possible that issues ofsay, it is “internalizing” the external effect. When we talkendogeneity and simultaneous decisions such as these doabout the community medical service delivery system, theoccur, so it is necessary to pay attention to this issue.

provider side of community medical service and the（3）Issues of multicollinearity

receiving side of the external effect such as the sense ofWith regard to estimating market land price functions forsecurity, are separated as different entities, but with local

which many local environmental attributes are allocatedresidents participating in the development of medical

explanatory variables, strong connection occurs between

service delivery system of their community and sharing

the

their

responsibility, including for its finance and management, it

independency, frequently causing the estimation to become

becomes possible to develop such a delivery system that is

unstable, making the dispersion of parameters bigger. As aappropriately balanced between burden and benefit,

fundamental counter action for multicollinearity like this, it

includingis possible to maintain mutual independency by increasing

departments. In reality, community medical service

the accuracy of explanatory variables themselves or making

delivery systems are developed by many medical service

variables to indicators. Even having done so, variables withinstitutions with different ownership entities, and it is notaexplanatory

correlation

adversely

remain,but

affecting

in

such

the

establishmentorremovalofclinicalcases,

realistic for local residents to participate therein including

coefficients of correlation need to be verified, and variables

responsibilities. However, when the number of community

with strong explanatory ability which are impervious to

medical service institutions is small and their ownership is

multicollinearity are to be selected using indicators such as

public, it is important that local residents get involved in

VIF（Variation Inflation Factor）, and applied as models. Or,

management including responsibilities, since they adjust

it is also possible to make a principal component analysis ofand consider the balance between benefits of the sense of

explanatory variables beforehand, sorting out common

security and the burden to develop a delivery system.

fluctuation and using them as variables.

Under certain conditions, “solution by negotiation” is also

40

strongvariables

J. Natl. Inst. Public Health, 59（1）: 2010

Takuma SUGAHARA

possible for creating a favorable solution incorporating

this case, when the cost of the establishment by each ownerexternal effects. Achieving appropriate levels is theoreticallyare different and authorities cannot grasp such information

possible if local residents fund their community medical

completely, it can be pointed out that it may fail to beservice delivery system by negotiating with the provider

consistent with the values of benefits, causing a large socialside, or by having a framework that the provider sidedamage.

compensates residents in the case of closing down orreducing

clinical

departments

from

the

level

they

Ⅵ．Conclusion

should be at. However, this achievement is accompanied byThis report, keeping in mind that re-structuring thereservations, which is “the case where no transaction cost

underfunded community medical service delivery systems

occurs”. In real negotiations, it will be difficult to grasp therequires appropriate medical investments, explained that

correct information about the level of external effects. And

the objective and valid evaluation of the community medical

representatives of the community spend lots of time andservice delivery system is necessary in order to realize

effort to fulfill their responsibility but its outcome affects

such needs. Based on this, after gaining a full understanding

other residents, therefore, there’ll be a problem of “freeof the aspects involved, which are “existence values” suchriding” creating a “negotiation cost” which would make it

as residents’ “sense of security” created by the existence ofdifficult to maintain a community s solidarity. Although it is

the medical delivery system itself, as positive external

not realistic for residents to claim compensation from

effects as defined by economics, the Hedonic Price Method

medical service institutions since they have no alternative

was used and the issues one would face when actually

to closing down or reducing departments, there is aapplying this method were discussed based on actual

possibility that increasing the retirement of baby-boomers,

experiences of making estimations. Moreover, by providing

who are willing and capable of helping their communities,

actual examples from Kobe-City, it was indicated that the

may contribute to solving this problem by reducing

existence of community medical service systems likenegotiation cost.

individual clinical departments have a value of themselves

Next, let’s think about the public solution to external
effects. Application offor local residents of a level up to 4 to 5 % of land prices. All

the “pigovian tax” and “directof us are aware of such value, but it was hardly explicitly

regulation” are to be discussed here with regard to theindicated in the past and never reflected in the policies

community medical service delivery system. As was shownof community medical service. However, if residents’in Fig. 1, personal marginal benefits and social marginal

evaluation is numerically expressed in this way, it will

benefits become separated due to external effects. The

become the basis for seeking an appropriate responsibility

solution using a pigovian tax enables a socially favorablefrom communities when re-structuring the community

level to be achieved by imposing a tax of the amountmedical service delivery systems that possess aspects of aequivalent to this price difference（subsidy in the case ofsocial common capital. Research on the evaluations of thepositive external effect）. The evaluation in this report also

values which community medical service system createsindicated that the existence of each clinical department inhave just started, and there remain many points to becommunities has created a positive external effect to local

discussed with regard to their application for actual

residents. These evaluations were made per one sq. meter

policies. However, in order to maintain community medicalof housing, but by multiplying this by the area of housing

service delivery system and to keep providing a sense ofsites in the community, for example, will make it possible tosecurity for residents, it is my conclusion that an approach

approximately calculate the benefits of the external effect,

like this is indispensable.

which is the aggregate sense of security provided byclinical departments in the community. The objective is to

Acknowledgements

develop a medical service delivery system which satisfies

The author would like to extend special thanks to

the values of its benefits, which is the sense of security for

Dr.Toshiro KUMAKAWA（National Institute of Public

residents , by subsiding a corresponding amount of money

Health）for his valuable comments in this discussion.

for establishing each clinical department. Direct regulations

Thanks also to Mrs. Miho SUZUKI（National Institute ofassume that authorities already know the value of benefits

Public Health）for her earnest research assistance. Of

forclinicalcourse the author takes full responsible for any mistakes

departments, and that they establish clinical departments

still remaining in this paper. Finally, this research wascorresponding to the values of benefits in terms of theirsupported in part by the Grant-in Aid for Scientificexpense, and plan development in a single uniform way. In

Research from the Ministry of Education, Science andresidents

regardingtheavailabilityof

J. Natl. Inst. Public Health, 59（1）: 201041

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Technology to Hitotsubashi University on Economic

Kaikeikensa Kenkyu 2000；22：47-62.
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Analysis of Intergenerational Issues.

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Tokyo：Tokyo University Press；1994．
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目的：本稿の目的は神戸市を対象に，地域住民が地域医療機関の存在によって感じる安心感などの「外部効果」の価値をヘドニック法によって診療科ごとに明らかにしつつ，その分析上，政策適用上の課題を整理することである．
方法：公示地価と土地属性，周辺地域の社会インフラの整備状況，周辺の医療提供体制に関わる項目を収集してデータセットを構築した．総サンプル数317のデータセットの基本統計量，相関分析をおこなった後，公示地価を被説明変数，諸特性を説明変数とするヘドニック法による回帰分析を実施し，その係数から診療科別に医療提供体制の価値評価を試みた．
またその分析過程で問題となった事項について整理し，現実の政策的な反映に関する方策についても考察した．
結果：相関分析の結果では，当該地点の地価と近隣に存在する各科診療機関数にはいずれも統計的に有意な正の相関が認められ，当該地価と最寄りの医療機関との距離にも統計的に有意な負の相関関係があった．ヘドニック地価関数の推定
では，近隣に医療機関が増加することによる地価増加，或いは最寄りの医療機関までの距離が伸びることによる地価低下が各々確認された．
結論：地域住民は近隣に医療機関の存在についてその外部効果の価値を認めている．社会的共通資本として地域医療提供体制のあり方を考えるにあたっては，地域に対する外部効果にあたる安心感の価値を評価，勘案し，政策立案に活かす必要があると考えられる．
キーワード：

地域医療提供体制，外部効果，ヘドニック法，社会的共通資本，安心感
菅原琢磨

42

J. Natl. Inst. Public Health, 59（1）: 2010

国立保健医療科学院経営科学部