Evaluating the Diversifying Market for and Viability of Rural Tourism Activity in Japan

This paper evaluated diversified rural tourism activities from the perspectives of economic viability and endogenous utilization of rural resources and investigated labour productivity. First, we presented a conceptual framework on how to evaluate economic viability and the endogenous mobilization of rural resources. Second, we empirically evaluated economic viability, the supply shift effect of endogenous utilization of rural resources and labour productivity with regard to rural tourism. The main findings are as follows. First, examination of the three main activities, i.e. accommodation, restaurant operation and direct selling of farm products, showed that both full-time and part-time labour input contribute more effectively to better sales than such labour for farm experience services, which means that these activities are viable whereas other activities that provide farming experience services did not yet clearly show evidence of a viable farm business. Second, we could not confirm the supply shift effect of endogenous innovative use of rural resources. Overall, it was evaluated that rural tourism in this country is undersupplied at a social optimal level. In the long run, institutional conditions for market formation and management skills for endogenous innovation in utilization of rural resources should be more intensely developed as a part of rural resource management policy.