Estimation of Optimal Metropolitan Size in Japan with Consideration of Social Costs

The main purpose of this study is to estimate the optimal city size which would attain maximum total surplus and sustainability, or a city size in which total benefits would equal total costs. We apply regressions to the total benefit function and the total cost function for 269 employment metropolitan areas for the year 2000 in Japan. Our study can be distinguished from others in that we include in total costs such social costs as environmental pollution. Our findings are that the optimal city size is 393,151 persons. The sustainable limit for city size is 1,057,412.