Policy Research Domains (Major Policy Research Domains) II. Promoting Innovation and Strengthening International Competitiveness

Micro Econometric Analysis of Performance in the Service Industry

Project Leader/Sub-Leader

KONISHI Yoko

KONISHI Yoko Fellow

Leader

Overview

2008 - 2010

As a first step in analyzing service industries, this project has set the beauty industry—specifically hairdressing salons—as the targeted area of analysis due to their relatively simple production structure. Almost all businesses in Japan's hairdressing industry are under individual management. Nationwide, there are more than 200,000 hairdressing salons in operation. Until the late 1990s, the industry adhered to standardized operating days, hours and charges that were effectively maintained through union activities and laws. Much of this has changed in recent years due to the abolition of laws, reduction in unionization and the emergence of charismatic hairdressers. As a result, the industry has experienced severe price wars and the difference between salons and available services continues to grow. To understand productivity in service industries, it is necessary to define the equivalent of the production function in a manufacturing industry. A model for this purpose must be sensitive to changes in demand; it must be restricted by "floor area, number of employees and business hours;" and it must also allow for an upper limit on supply volume. This project involves collecting extremely detailed information regarding finance, customers, and labor from six hairdressing salons to be used in investigating the structures of supply and demand in the beauty industry.

July 14, 2008 -

Major Research Results