Designing Effective Environmental Policies With Environmental Economics: An Interview With Associate Professor Yokoo Hide-Fumi, Hitotsubashi University

JICA Ogata Sadako Research Institute for Peace and Development (JICA Ogata Research Institute) conducts research activities through collaborations with outstanding researchers in various fields. One such researcher is Yokoo Hide-Fumi, an associate professor at Hitotsubashi University. He applies environmental economics to design effective environmental policy proposals, based on detailed data. We asked him about the significance of collaborating with the JICA Ogata Research Institute and the achievements gained from the collaboration.

Yokoo is an expert on randomized controlled trials (RCTs), a type of experimental study design, in which a group receiving an intervention and a control group are chosen at random and outcome differences are compared to verify the effectiveness of the intervention. Yokoo has conducted RCTs in the field of environmental economics, which applies methods of economics to study environmental policies and pro-environmental behavior. He is focusing in particular on waste management and energy issues in Asia.

The collaboration between Yokoo and the JICA Ogata Research Institute started by chance. One of the institute’s research fellows participated in a study group meeting, in which Yokoo gave a presentation on waste-recycling behaviors of households in Vietnam. Impressed by Yokoo’s presentation, she immediately called her colleague at the JICA Indonesia Office, which works on the “Project for Capacity Development of Central and Local Governments for 3R and Domestic Solid Waste Management System.”

“Shortly after the presentation, I was contacted by a representative of the JICA Indonesia Office. Following continued discussion with the Office on how to get more residents involved and how to make community-based waste collection widespread, in 2016, I became the adviser of this project. I started to analyze collected data with RCTs,” says Yokoo.

At the time, waste collection services by local governments in Indonesia were inadequate and dumping and incineration took place illegally. While both the human resources and funding needed for these services were short, the Indonesian government began to support the operation of local community-led waste collection services, and JICA helped this effort. This system requires residents to pay membership fees in order to receive the service. Therefore, the key was to get as many residents as possible to become members so that the service can pay for itself.

Therefore, Yokoo and other project members conducted RCTs to identify methods for effective resident solicitation. 750 households were randomly put into three groups. Descriptions in flyers and solicitation methods including how to talk to the locals were changed between each group. An analysis to identify solicitation methods to achieve membership growth was then conducted.

Results showed that regardless of what is written on the flyers, “who solicits whom for what in what situation” tends to influence the locals’ decision making on whether to join the system. Meanwhile, it was also revealed that explaining to households with no children that environmental pollution can impact the future of children is not only ineffective but in fact has a negative impact, stopping them from joining. In other words, it became clear that to increase membership, it is essential to change solicitation methods, depending on household types.

Yokoo comments with regards to the benefits achieved by collaborating with JICA: “Before we started the RCTs, the JICA project was already there, building trust with local communities. This enabled us to collect credible data that reflects reality, which are the key to effective policy formulation.”

Details of the outcomes of this study can be found in the below discussion paper.
What Makes Green Persuasion Effective? Evidence from a Community-Financed Sanitation Program in Indonesia | Publications - JICA Ogata Research Institute

The outcome of this study was published in the journal, Resource and Energy Economics.
What makes green persuasion effective? Evidence from a community-financed sanitation program in Indonesia - ScienceDirect

From JICA’s standpoint, verification of the effectiveness of policies is important for effective development cooperation. Researchers who conduct analysis based on data and practitioners who implement interventions both play integral parts. In this project, Yokoo, the JICA Ogata Research Institute, the JICA Indonesia Office and the relevant department at the JICA headquarters, all worked in concert for the successful delivery of the project. As a matter of fact, the JICA staffer who was in charge of this project at the Indonesia Office and initially contacted Yokoo was Harada Tetsuya, who is now an executive senior research fellow at the JICA Ogata Research Institute. Yokoo and Harada have worked together since then and their collaboration resulted in the discussion paper “What Makes Green Persuasion Effective? Evidence from a Community-Financed Sanitation Program in Indonesia”.

“Community-operated waste management was popular throughout Indonesia back then, but there were many reports on unsuccessful cases. By working with Yokoo, whose studies focus on human behavior, we were able to compile evidence of factors that promote citizen participation through JICA projects. This process had great significance from a policy perspective,” Harada reflects.

With an interest in developing countries and poverty reduction from his childhood, Yokoo came to think in his teens that he wants to work on solving poverty and hunger by addressing environmental issues and global warming. Yokoo reflects that when he was in high school, his physics teacher recommended “Kankyo Keizaigaku he no Shotai” (translates to “An Invitation to Environmental Economics” in English), a book by Ueta Kazuhiro (published by Maruzen Co., Ltd). “I was literally invited by this book,” he laughs.

“I became aspired to study environmental economics after being strongly moved by this book, which discusses an approach that neither suppresses economic activities to protect the environment and puts the environment first no matter what nor is based on anthropocentrism in a strict sense and prioritizes economic growth over the environment. As an undergraduate and during graduate school, I studied under Professor Ueta Kazuhiro, the author of this book.”

Yokoo says that a study using RCT to find measures for global poverty mitigation was awarded the 2019 Nobel Prize in Economics and is gaining attention. Its application is no longer limited in the fields of medicine and education but is now expanding into environmental fields as well. RCT is used in Japan too, for example, to verify the effectiveness of proposing electricity-saving utility rate plans.

While mentioning the ability to verify effectiveness based on precise data as an advantage, Yokoo pointed out some ethical issues around randomly selecting study-subject groups as well.

In the medical field, when testing the effects of a new drug, subjects are told in advance that they may be given a fake drug instead of the new drug. On the other hand, when testing the effects of an environmental policy, it is sometimes better not to explain the intentions of the policy to the subjects in advance because such information may influence the reactions of the subjects. He says that how RCTs can be accepted by society is one of his current research topics. On the long run, he envisions collecting data to study human behavior toward climate change.

In April 2023, Yokoo launched an environmental economics research group for undergraduates at the Faculty of Economics, Hitotsubashi University. Just like how he learned from many academic staff to date, Yokoo has now opened the door for students to study environmental economics.


About the Interviewee:
Yokoo Hide-Fumi became an associate professor at the Graduate School of Economics, Hitotsubashi University, in April 2023. His previous positions include assistant professor at the Department of International Studies, Division of Environmental Studies, Graduate School of Frontier Sciences, The University of Tokyo. Yokoo holds a PhD in Economics from the Graduate School of Economics, Kyoto University.