An evaluation of inclusive capital stock for urban planning

Rapid urbanization has caused significant problems, and sustainable city design can play an important role in solving these problems under limited budgets and resources. Previous studies have proposed city evaluation indicators that can suggest appropriate urban designs. However, these indicators do not clearly consider economic theory, which is crucial for understanding accumulation of urban capital stock by the flows from daily urban activities. This study proposes a research framework based on economic theory for evaluating urban sustainability; this framework uses the inclusive wealth index (IWI) concept to examine inclusive urban capital stock. It examines the advantages of using the IWI as a city evaluation indicator along with data envelopment analysis and a decomposition analysis framework. We use data for 20 Japanese ordinance‐designated cities for an empirical study to demonstrate a proposed approach for evaluating inclusive urban capital. The developed research application evaluates each city's relative superiority in terms of capital accumulation and identifies those factors determining changes in capital flows via changes in efficiency, priority, and scale. The combination of these results can be helpful to decision makers seeking to increase urban capital by considering reference city information and relative superiority.