Fumio Ohtake

Hyperbolic discounting, the sign effect, and the body mass index.

Analysis of a broad survey of Japanese adults confirms that time discounting relates to body weight, not only via impatience, but also via hyperbolic discounting, proxied by inclination toward procrastination, and the sign effect, where future negative payoffs are discounted at a lower rate than future positive payoffs. Body mass index is positively associated with survey responses indicative of impatience and hyperbolic discounting, and negatively associated with those indicative of the sign effect. A one-unit increase in the degree of procrastination is associated with a 2.81 percentage-point increase in the probability of being obese. Subjects exhibiting the sign effect show a 3.69 percentage-point lower probability of being obese and a 4.02 percentage-point higher probability of being underweight than those without the sign effect. These effects are substantial compared with the prevalence rates of the corresponding body mass status. Obesity and underweight thus result in part from the temporal decision biases.

The effect of demographics on the Japanese housing market

Abstract Japanese housing price determination mechanisms are analyzed using the housing demand index of demographic factors proposed by Mankiw and Weil ( Regional Science and Urban Economics , 1989, 19, 235–258). The distinctive feature of this paper is that we distinguish between the long-run and short-run effects using the notion of cointegration and an error correction model. We find a high price elasticity for long-run housing supply contrary to the U.S. results and conclude that the effect of the demographics on housing prices in Japan appears through a short-run adjustment process.

Inequality in Japan

This paper analyzes income inequality, based on government income statistics and an attitude survey. First, the paper describes the present income inequality in Japan by using Gini coefficients, the income share of the top and bottom income classes, and mobilities among income classes. Second, by using the Japan–USA international survey, this paper analyzes the cause of the increasing awareness that Japans income gap is widening. In these two countries, their distinct value judgments about the causes for the gap influence how they perceive it. The Japanese have negative perceptions about the income gap because they perceive it to be influenced by talent, academic background, or luck, and this perception seems relatively uncommon in the USA. A large percentage of Japanese also think ones income is decided by talent, academic background, or luck, although it should not be. Such disagreements between the desired and perceived determinants of income are thought to raise their negative perception of the gap.

Who Supports Redistribution

Using an original data set, we investigated the determinants of individual preferences over income redistribution in Japan. Although income level is negatively correlated with support for redistribution, it does not explain much; there are other important factors that relate to dynamics and uncertainty, such as income risk. Even after controlling for income, both risk-averse individuals and those who expect to be unemployed in the future favour greater redistribution. Interaction of ageing and mobility prove important. The relatively poor elderly, who presumably have few prospects of upward mobility, strongly support greater redistribution, whereas younger people are less sympathetic to such a policy. JEL Classification Numbers: D31, H23, I38

Postwar business cycles in Japan: A quest for the right explanation

Abstract This paper explores the nature of postwar business cycles in Japan. Our basic strategy is to study different production behaviors of various manufacturing industries over business cycles. We are particularly interested in the problems of whether only monetary shocks are important and, if not, what kind of real shocks are important. We conclude that purely monetary theory is inadequate, and that construction activities were major causes of aggregate fluctuations in the pre-first oil shock period of rapid growth. We also present some evidence suggesting that real business cycle theory is implausible.

Neural Mechanisms of Gain–Loss Asymmetry in Temporal Discounting

Humans typically discount future gains more than losses. This phenomenon is referred to as the “sign effect” in experimental and behavioral economics. Although recent studies have reported associations between the sign effect and important social problems, such as obesity and incurring multiple debts, the biological basis for this phenomenon remains poorly understood. Here, we hypothesized that enhanced loss-related neural processing in magnitude and/or delay representation are causes of the sign effect. We examined participants performing intertemporal choice tasks involving future gains or losses and compared the brain activity of those who exhibited the sign effect and those who did not. When predicting future losses, significant differences were apparent between the two participant groups in terms of striatal activity representing delay length and in insular activity representing sensitivity to magnitude. Furthermore, participants with the sign effect exhibited a greater insular response to the magnitude of loss than to that of gain, and also a greater striatal response to the delay of loss than to that of gain. These findings may provide a new biological perspective for the development of novel treatments and preventive measures for social problems associated with the sign effect.

How Do High School Graduates in Japan Compete for Regular, Full‐Time Jobs? An Empirical Analysis Based Upon an Internet Survey of the Youth

We use a survey of the Japanese youth within 10 year after high school graduation to investiage the impacts of the academic and social skills on their success in the job market. We find three major factors account for the job market outcome immediately after school: school characteristics and job placement services, academic performance, and social skills, including the negative impacts of problematic behaviors at the school. Second, when we run a Probit regression on whether or not the surveyed individuals hold regular, full time job, we find the persistent but declining (over age) im- pact of the job placement immediately after school. Moreover, we find the impact of variables pertaining to the sociall skills remain significant even after controling for the job placement outcome after school, whereas other variables such as GPA or attributes of highschools are largely irrelevant to the current employment status.

Asking About Changes in Happiness in a Daily Web Survey and Its Implication for the Easterlin Paradox

This chapter investigates whether the level of happiness and integrated process of changes in happiness are the same. Using the daily data of two waves of 4 and 6 months each, we found that the level of happiness is stationary, whereas the integrated process of changes is non-stationary with a rising trend, implying that they are different series. An examination of the causes of the difference indicated that although adaptation completely influences the level of happiness, it only partially influences the change in happiness. This may be because the latter is based on a comparison between today and yesterday,

Effects of the old-age pension system for active employees on the labor supply of elderly male workers

This book provides a comprehensive appraisal of social security in Japan, where traditionally the burden of welfare provision has been the main responsibility of the family and employers, rather than the state. However, an ageing population, changes in family structure and continued recession has led to an urgent reappraisal of this situation.

Asking about Changes in Happiness in a Daily Web Survey

This paper investigates whether the level of happiness and integrated process of changes in happiness are the same. Using the daily data of two waves of four and six months each, we found that the level of happiness is stationary, whereas the integrated process of changes is non-stationary with a rising trend, implying that they are different series. An examination of the causes of the difference indicated that although adaptation completely influences the level of happiness, it only partially influences the change in happiness. This may be because the latter is based on a comparison between today and yesterday.