Measurement of Optimal City Sizes in Japan: A Surplus Function Approach

This paper measures optimal city sizes for Japanese metropolitan areas, using a surplus function approach. The surplus function is defined as the difference between the total disposable income and the total expenditure of the households working and living in the metropolitan areas and the optimal city size refers to such a population of metropolitan areas that maximises the surplus function. The estimated results show that the optimal city size of Japanese metropolitan areas in the year 2000 was a population of about 18 million, which means that the Tokyo metropolitan area, with nearly 32 million inhabitants, is obviously too large.