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Short-term economic effect of the M7.0 Lushan Earthquake

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  • Zhengru Tao

Abstract

To estimate the short-term economic effect of the 2013 M7.0 Lushan Earthquake, the constant mean return model and the market model of event study are adopted. On the levels of the whole stock market, some typical sectors, regional stocks, and the stock in the affected area, effects are measured. Three indices are adopted to measure the whole market. Nine indices are selected to observe the abnormal returns of the sectors, involving Energy, Materials, Industries, Consumer, Health care, Finance, Information technology, Telecommunication service, and Utilities. In Sichuan Province, there are 82 registered stocks with enough trading data, whose abnormal returns are calculated to test the short-term effect on the regional economy. And in the affected area, only one stock is registered. The result indicates that abnormal returns from the whole market, nine sectors, and the region are not significant at the level of 0.01 in the following 10 days. Copyright Springer Science+Business Media Dordrecht 2014

Suggested Citation

  • Zhengru Tao, 2014. "Short-term economic effect of the M7.0 Lushan Earthquake," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 70(2), pages 1247-1261, January.
    • Handle: RePEc:spr:nathaz:v:70:y:2014:i:2:p:1247-1261
    DOI: 10.1007/s11069-013-0871-z
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    References listed on IDEAS

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    1. Kawashima, Shingo & Takeda, Fumiko, 2012. "The effect of the Fukushima nuclear accident on stock prices of electric power utilities in Japan," Energy Economics, Elsevier, vol. 34(6), pages 2029-2038.
    2. A. Craig MacKinlay, 1997. "Event Studies in Economics and Finance," Journal of Economic Literature, American Economic Association, vol. 35(1), pages 13-39, March.
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    1. Chia-Lin Chang & Shu-Han Hsu & Michael McAleer, 2018. "An Event Study Analysis of Political Events, Disasters, and Accidents for Chinese Tourists to Taiwan," Sustainability, MDPI, vol. 10(11), pages 1-77, November.

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