Emotional and Community support

for the Elderly on Rokko Island

Natsuki Yoshioka

Issues and Involvement of the Third Party

• Issue

• There are not enough people who are concerned about the aging

population in Rokko Island.

• There is not enough community and emotional support to the elderly.

• 3rd Party Costs and Benefits

• Third Party: Society (People of Rokko Island)

• Costs: Opportunity costs

• Money spent on Elderly Homes could be spent for schools or hospitals

instead

• Benefits: Sense of Security

• The people (not the elderly) living in Rokko Island will feel more relieved that

they will be taken care of in the futur

• The hospitals would not be dominated by the elderly

The ‘Before’ DiagramFig. 1: Positive Production Externality

Price

Quantity

S=MPC

D=MPB

P1

Q1

MSC

Spillover Benefits

0 QOpt

Solutions

• Increasing the supply through a subsidy

• Have more elderly homes built, with a subsidy

• Pros and Cons

• Pros: The elderly people will be more taken cared; More job opportunities are available

• Cons: Money and Space can be used for other beneficial things

• Tradeoffs

• More schools, or hospitals can be made instead

The ‘After’ Diagram

Price

Quantity

S=MPC

D=MPB

P1

Q

MSC

Spillover Benefits = Subsidy

0 QOpt

P

Fig. 2: Correcting the Positive Producer Externality by use of a subsidy

Conclusion

• Issue

• The necessity of emotional and community support

for the elderly people in Rokko Island

• Solution

• Through a subsidy, create more elderly homes

• The elderly people will be cared by professionals and

can help the society (Rokko Island) in various ways