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Sustainable development of rural regions: metafrontier data envelopment analysis of hometown tax in municipality K

Author

Listed:
  • Jing Fu

    (Fukuoka Institute of Technology)

  • Hideyuki Fujii

    (Fukuoka Institute of Technology)

Abstract

Hometown tax is a unique system in Japan that allows people to donate to any municipality of their choice, and donors in turn receive tax benefits and reciprocal gifts under specific conditions. This system was initially introduced in 2008 for the revitalization and sustainable development of rural municipalities by reducing the tax revenue gaps with urban areas. To attract more donations, the competition over reciprocal gifts among municipalities has intensified in recent years. In 2019, the government issued strict regulations on the gifts to prevent municipalities from giving excessively high-value goods. Hence, most municipalities face pressures to review and adjust the gift lineup to maintain competitiveness and acquire stable independent tax revenue under the new regulations. This study selected municipality K as an example and utilized the metafrontier data envelopment analysis to obtain insights into the performance of various groups of reciprocal gifts and gift providers with different production frontiers. The cross-analysis of the metafrontier efficiencies, the group frontier efficiencies, and metatechnology ratios showed that: (1) the gift lineups of drinks, vegetables, fruits, rice, and tickets with relatively lower metafrontier efficiencies and metatechnology ratios need to be investigated and adjusted with higher priority; (2) providers of drinks & alcohol, vegetables & fruits, daily necessities & ornaments, and tickets performed poorer than other providers. Based on our analysis, we presented a comprehensive gift lineup adjustment proposal for municipality K that can also be taken as a reference analysis model for other municipalities.

Suggested Citation

  • Jing Fu & Hideyuki Fujii, 2023. "Sustainable development of rural regions: metafrontier data envelopment analysis of hometown tax in municipality K," Asia-Pacific Journal of Regional Science, Springer, vol. 7(3), pages 775-806, September.
    • Handle: RePEc:spr:apjors:v:7:y:2023:i:3:d:10.1007_s41685-023-00281-y
    DOI: 10.1007/s41685-023-00281-y
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    References listed on IDEAS

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    1. Charnes, A. & Cooper, W. W. & Rhodes, E., 1978. "Measuring the efficiency of decision making units," European Journal of Operational Research, Elsevier, vol. 2(6), pages 429-444, November.
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    3. Takaaki Hoda & Richard B. Dasher, 2021. "Local Tax Benefits at a Distance," SpringerBriefs in Economics, Springer, number 978-981-16-5138-0, June.
    4. Takaaki Hoda & Richard B. Dasher, 2021. "Effects of Fostering Local Businesses and Measures for Enhancing Business Capabilities: —Based on Case Studies on Hometown Tax Donation Gift Providers," SpringerBriefs in Economics, in: Local Tax Benefits at a Distance, chapter 0, pages 19-33, Springer.
    5. Yantuan Yu & Jianhuan Huang & Yanmin Shao, 2019. "The Sustainability Performance of Chinese Banks: A New Network Data Envelopment Analysis Approach and Panel Regression," Sustainability, MDPI, vol. 11(6), pages 1-25, March.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Metafrontier data envelopment analysis; Metafrontier technical efficiency; Group frontier technical efficiency; Metatechnology ratio; Hometown tax; Reciprocal gift lineup;
    All these keywords.

    JEL classification:

    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy
    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models

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