Average Propagation Length and the Economic Zone of Nagoya Metropolitan Area

Nagoya is the third-largest metropolitan area in Japan, following Tokyo and Osaka. Nagoya City, the capital city of Aichi Prefecture, is the economic center of the Tokai Region, which covers three prefectures: Aichi, Mie, and Gifu. When we focus on the Nagoya metropolitan area, the inter-prefectural IOT like the Chubu region, discussed in Chapter 6, is not a proper tool because prefectures are too large a region to analyze issues in metropolitan areas. Though, ideally input-output analysis should be performed based on the municipalities that each prefecture is divided into, we use an interregional IOT that aggregates each municipality into the 14 regions described in Chapter 7. We apply the Average Propagation Lengths (APL) tool proposed by Dietzenbacher et al. (2005), which is the analytical tool to show the economic distance through the transaction of intermediate goods by sector. We investigate the relationship between the APL distance and physical distance and consider the boundary of the metropolitan area. We then present a way to cope with the various inconsistencies of regional definitions, administrative and economic, in the input-output analysis.