By Kay Hasegawa
In 2015, 7,260,093 individuals donated a total of ¥165,291,021,000 (approximately 1.5 billion USD total) to 1,741 municipalities in Japan using the furusato nouzei system (Ministry of Internal Affairs and Communications). In this paper, I examine this system in two ways. Firstly, I predict the amount of donations each municipality receives based on a number of explanatory variables. Secondly, I run a 2SLS difference-in-differences regression to see if the tax was successfully redistributing wealth from city centers to rural areas, using an increase in municipal-level expenditure as a proxy.
Advisor: Charles BeckerJEL Codes: H2, H21, H27