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Japan, often regarded as one of the world’s most egalitarian societies, has faced increasing rural–urban disparity since the late 1980s. However, even if the wages and income levels of rural populations are lower than those of urban residents, some people will remain in the rural areas or, in some cases, return from the cities. These observations imply the necessity of measuring the rural–urban disparity in Japan as well as the need for an alternative indicator to the conventional economic tools for taking this disparity measurement. The objective of this paper is to measure rural–urban disparity with GPI based on a case study in Japan. The results of this analysis present two key findings. First, the rural–urban disparity measured by the GPI is much smaller than that measured by GDP. Second, the GPI disparity has been an increasing trend, particularly after the 2000s, due to the increased cost of climate change in rural areas. GPI can identify some strengths of rural areas that are not captured by GDP, but these advantages are cancelled out by the increasing cost of climate change.

Ecological Economics, vol. 120, December 2015, p.260-271