Regional and Local Economic Effects from Proximity of High-Speed Rail Stations in Japan: Difference-in-Differences and Propensity Score Matching Analysis
This paper gives empirical evidence about the economic effects of the proximity of high-speed rail (HSR) on regional/local production and labor productivity in Japan. The effects on regional and local scales are analyzed based on a Difference-in-Differences (DID) method and a Propensity Score Matching (PSM) method. The prefecture-level analysis investigates the effect on regional production at the prefecture level from 1981 to 2006 and the municipality-level analysis investigates the effect on the local tax revenue and the tax revenue per capita at the municipality level, particularly focusing on new HSR extensions between 2010 and 2015. The results from both levels showed statistically insignificant estimations of both the DID effect and the Average Treatment effect on the Treated from PSM, which implies that, on average, there is no direct effect from the proximity to HSR services on regional or local production or productivity. One of the potential reasons, the range of the distance from the HSR services at which the impact on the local economy is felt, is discussed. Further analysis showed that the range at which HSR services have an impact on local tax revenue per payer could vary from 10 to 30 km, depending on local characteristics in the location of the HSR station.