Tokyo Center for Economic Research

The Latest TCER Working Papers

October 2014
Price and Quality Changes in Outsiders of Regional Trade Agreements

Toshiyuki Matsuura, Kazunobu Hayakawa, Nuttawut LAKSANAPANYAKUL and Yuta Watabe

Countries excluded from a regional trade agreement face disadvantages in tariffs when exporting to member countries. In this context, previous studies found that such excluded countries, i.e., outsiders, lower their export prices. In contrast, this study aims to examine not only prices but also the quality of outsiders。ッ exports. Specifically, we first estimate the quality of products exported from each country to Thailand under certain tariff schemes. In addition to our estimates on cross-price elasticity, we use this measure to compute the potential magnitude of trade diversion for outsiders. Then, we investigate the relationship between this trade diversion and changes in the quality of exports from outsiders. Consequently, we found that only outsiders exporting higher quality products exhibited a greater improvement in quality to decrease the negative effect of tariff disadvantages.
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September 2014
Market penetration of imported agricultural products: A hedonic analysis of the Japanese table wine market

Vincent Hoang, Takao Iida, Shigeru Matsumoto, Natsuki Watanabe and Clevo Wilson

Although hundreds of thousands of agricultural products are traded on a daily basis, it is less known how imported agricultural products gain consumer acceptance and penetrate a domestic market. This paper analyzes Japanese wine point of sale (POS) data and examines how consumer valuation of imported wines changes with their market penetration. Although there is a considerable variation in sales of wines, previous papers have not accounted for it in their hedonic analyses. The wine hedonic analysis accounted for the variation in sales shows that the retail sales prices of imported wine decreases with their market penetration. The analysis also shows that although consumers pay a premium for wine with a long sales history, this premium is not large enough to compensate for the price reduction brought about by sales expansion. Many exporting counties promote organic farming for environmental conservation. The paper further examines whether consumers in an importing country differentiate between local and imported organic products. The result shows that the premium for imported organic red (white) wines is about 42.996% (8.872%) while that for domestic red (white) organic wines is about 6.440% (1.214%), implying that Japanese consumers pay higher premiums for imported organic agricultural products than for those produced in Japan.
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September 2014
Can Green Car Taxes Restore Efficiency? Evidence from the Japanese New Car Market

Yoshifumi Konishi and Meng Zhao

We investigate the efficiency of vehicle taxation in second-best settings. A random-coefficients logit model is estimated for quarterly automobile sales data between 2004 and 2012 from the Japanese new car market. The quasi-experimental nature of the data is exploited in two ways. First, we construct the location of product-specific tax rates in the characteristics space as a set of instruments to control for endogeneity of observed car prices. Second, the large and persistent variation in effective vehicle prices, caused due to Japan’s green car tax policy since 2009, are used to obtain consistent estimates of the own- and cross-price elasticities. Our results indicate evidence for substantial scale and composition effects: Though the policy successfully reduced sales-weighted average emissions, it also increased total sales substantially. Consequently, the policy-induced reduction in annual vehicle CO2 emissions was small. In contrast, a modified version of the emissions-based vehicle tax ィ、 la Fullterton and West (2002), based on the fuel efficiencies of car models, could have reduced annual vehicle CO2 emissions substantially more while increasing total economic surplus relative to the no policy counterfactual.
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September 2014
Pareto-improving Immigration and Its Effect on Capital Accumulation in the Presence of Social Security

Hisahiro Naito

The effect of accepting more immigrants on welfare in the presence of a pay-as-you-go social security system is analyzed qualitatively and quantitatively. First, it is shown that if initially there exist intergenerational government transfers from the young to the old, the government can lead an economy to the (modified) golden rule level within a finite time in a Pareto-improving way by increasing the percentage of immigrants to natives (PITN). Second, using the computational overlapping generation model, the welfare gain is calculated of increasing the PITN from 15.5 percent to 25.5 percent and years needed to reach the (modified) golden rule level in a Pareto-improving way in a model economy. The simulation shows that the present value of the welfare gain of increasing the PITN comprises 23 percent of the initial GDP. It takes 112 years for the model economy to reach the golden rule level in a Pareto-improving way.
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13. October 2014


We are pleased to inform you that the 16th Macro Conference will be held at Keio University’s Mita Campus on Saturday-Sunday, November 29-30, 2014. If you are interested in submitting a paper to the conference, please send your paper by email as an attached file to all the four program committee members shown below. There will be no particular topic for this conference, and any macroeconomics-related paper will be welcome, whether it is theoretical or empirical.

The conference will receive financial supports this year from the Tokyo Center for Economic Research (TCER), Faculty of Economics, Keio University, the UTokyo Price Project, Research Center for Economic and Social Risks, Hitotsubashi University, Research Grant: “Japan’s international adjustments under the aging and population decline”, and the Institute of Social and Economic Research of Osaka University.

The deadline of submission is Sunday, August 31, 2014 (Japan time). Full papers are preferred but a 10-page abstract is also acceptable. Also, please suggest two individuals as designated discussants, although it is not necessary to contact them in advance. In either case, please make sure to send your full paper to the four program committee members and to the designated discussant by Friday, October 31, 2014 (Japan time). We will inform you of our decision on or around Tuesday, September 30, 2014.

We will pay the travel and lodging expenses of all paper presenters, designated discussants, and chairpersons. However, we may not be able to pay for the travel expenses of those coming from abroad.

We look forward to receiving many interesting submissions.

With best wishes,

Co-Sponsors/Organizing Committee
Naohito Abe, Tokuo Iwaisako (Hitotsubashi University)
Yoshiyasu Ono (Osaka University)
Masaya Sakuragawa (Keio University)
Tsutomu Watanabe (University of Tokyo)

Program Committee (to which submissions should be sent)
Kosuke Aoki (University of Tokyo)
Kazuo Ogawa (Osaka University)
Etsuro Shioji (Hitotsubashi University)
Yasuo Hirose (Keio University)
(Please send your paper to all four of us, simultaneously.)

20. June 2014

[News] Call for papers: Unconventional Policy and Emerging Economies

TCER (Tokyo Center of Economic Research) and Institute of Developing Economies (IDE-JETOR) plan to have a conference on “The Effects of Unconventional Monetary Policy on Emerging Economies”. As the theme shows, our main interest is to see what impacts recent unconventional monetary expansion in developed countries had on various emerging economies. We accept any paper that analyzes the related topics. The conference will be held at the University of Tokyo in March 2015. If you are interested in contributing a paper for the conference, send your first draft to by the end of November 2014.

A special issue of the Developing Economies (DE) on the conference theme will be published under the Guest Editorship. Authors whose papers are presented at the conference are supposed to submit their papers to the DE special issue. Papers submitted for this special issue will undergo the normal journal reviewing process.

DE is an academic journal published by WILEY-BLACKWELL and has ISI impact factor. Its details are available at

April 21, 2014
Shin-ichi Fukuda, Professor, The University of Tokyo, Japan
Etsuro Shioji, Professor, Hitotsubashi University, Japan

20. April 2014