Discussion Papers

Well-being effects of a major negative externality: The case of Fukushima

DP Number DP-2013-001
Language 英語のみ
Date July, 2013
Author Katrin Rehdanz, Heinz Welsch, Daiju Narita, Toshihiro Okubo
JEL Classification codes D62; Q51; Q54; I31
Keywords Fukushima, subjective well-being, nuclear disaster, difference-in-differences, willingness to pay
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Following a major earthquake off the Pacific coast of Japan, a tsunami disabled the power
supply and cooling of three reactors in Fukushima, causing a major nuclear accident on 11
March 2011. Based on a quasi-experimental difference-in-differences approach we use panel
data for 5,979 individuals interviewed in Japan before and after the accident to analyze the
effect of the accident on people’s subjective well-being. Our main hypotheses are that this
effect declines with distance to the place of the event but also with distance to other nuclear
power plants. To test these hypotheses, we use Geographical Information Systems to merge
the well-being data with information on respondents’ distance to the Fukushima nuclear plant
and on their proximity to nuclear power stations in general. Our empirical results suggest the
existence of significant well-being effects of the combined event of the earthquake, tsunami
and nuclear accident that are proportional to proximity to the Fukushima site being equivalent
to up to 72 percent of annual household income. We find no evidence for increased nationwide
worry about the presence of nuclear power plants near people’s place of residence.