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

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Author Info

  • Katrin Rehdanz

    (IFW Kiel)

  • Welsch Heinz

    ()
    (University of Oldenburg, Department of Economics)

  • Daiju Naritaa
  • Toshihiro Okubod

Abstract

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 nation-wide worry about the presence of nuclear power plants near people’s place of residence.

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File URL: http://www.uni-oldenburg.de/fileadmin/user_upload/wire/fachgebiete/vwl/V-358-13.pdf
File Function: First version, 2013
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Bibliographic Info

Paper provided by University of Oldenburg, Department of Economics in its series Working Papers with number V-358-13.

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Length: 31 pages
Date of creation: Jul 2013
Date of revision: Jul 2013
Publication status: Published in Oldenburg Working Papers V-358-13
Handle: RePEc:old:dpaper:358

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Postal: 26111 Oldenburg
Phone: +49 441 798-4107
Fax: +49 441 798-4116
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Web page: http://www.vwl.uni-oldenburg.de/
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Keywords: Fukushima; subjective well-being; nuclear disaster; difference-in-differences; willingness to pay;

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References

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  1. Heinz Welsch & Jan Kühling, 2009. "Using Happiness Data For Environmental Valuation: Issues And Applications," Journal of Economic Surveys, Wiley Blackwell, vol. 23(2), pages 385-406, 04.
  2. Ada Ferrer-i-Carbonell & Paul Frijters, 2004. "How Important is Methodology for the estimates of the determinants of Happiness?," Economic Journal, Royal Economic Society, vol. 114(497), pages 641-659, 07.
  3. Bernard M.S. van Praag & B.E. Baarsma, 2004. "Using Happiness Surveys to value Intangibles; the Case of Airport Noise," Tinbergen Institute Discussion Papers 04-024/3, Tinbergen Institute.
  4. Bruce D. Meyer, 1994. "Natural and Quasi- Experiments in Economics," NBER Technical Working Papers 0170, National Bureau of Economic Research, Inc.
  5. Rehdanz, Katrin & Maddison, David, 2005. "Climate and happiness," Ecological Economics, Elsevier, vol. 52(1), pages 111-125, January.
    • Katrin Rehdanz & David J. Maddison, 2003. "Climate and Happiness," Working Papers FNU-20, Research unit Sustainability and Global Change, Hamburg University, revised Apr 2003.
  6. Levinson, Arik, 2012. "Valuing public goods using happiness data: The case of air quality," Journal of Public Economics, Elsevier, vol. 96(9-10), pages 869-880.
  7. Bruno Frey & Simon Luechinger & Alois Stutzer, 2009. "The life satisfaction approach to valuing public goods: The case of terrorism," Public Choice, Springer, vol. 138(3), pages 317-345, March.
  8. Heinz Welsch, 2008. "The welfare costs of corruption," Applied Economics, Taylor & Francis Journals, vol. 40(14), pages 1839-1849.
  9. Dolan, Paul & Peasgood, Tessa & White, Mathew, 2008. "Do we really know what makes us happy A review of the economic literature on the factors associated with subjective well-being," Journal of Economic Psychology, Elsevier, vol. 29(1), pages 94-122, February.
  10. Robert Metcalfe & Nattavudh Powdthavee & Paul Dolan, 2011. "Destruction and Distress: Using a Quasi‐Experiment to Show the Effects of the September 11 Attacks on Mental Well‐Being in the United Kingdom," Economic Journal, Royal Economic Society, vol. 121(550), pages F81-F103, February.
  11. Robert J. MacCulloch & Rafael Di Tella & Andrew J. Oswald, 2001. "Preferences over Inflation and Unemployment: Evidence from Surveys of Happiness," American Economic Review, American Economic Association, vol. 91(1), pages 335-341, March.
  12. George MacKerron, 2012. "Happiness Economics From 35 000 Feet," Journal of Economic Surveys, Wiley Blackwell, vol. 26(4), pages 705-735, 09.
  13. David Maddison & Katrin Rehdanz, 2010. "The Impact of Climate on Life Satisfaction," Kiel Working Papers 1658, Kiel Institute for the World Economy.
  14. Luechinger, Simon & Raschky, Paul A., 2009. "Valuing flood disasters using the life satisfaction approach," Journal of Public Economics, Elsevier, vol. 93(3-4), pages 620-633, April.
  15. Welsch, Heinz, 2006. "Environment and happiness: Valuation of air pollution using life satisfaction data," Ecological Economics, Elsevier, vol. 58(4), pages 801-813, July.
  16. Bruno S. Frey & Alois Stutzer, 2000. "Happiness, Economy and Institutions," CESifo Working Paper Series 246, CESifo Group Munich.
  17. Welsch, Heinz, 2002. "Preferences over Prosperity and Pollution: Environmental Valuation Based on Happiness Surveys," Kyklos, Wiley Blackwell, vol. 55(4), pages 473-94.
  18. Bruno S. Frey & Alois Stutzer, 2001. "What Can Economists Learn from Happiness Research?," CESifo Working Paper Series 503, CESifo Group Munich.
  19. Susana Ferreira & Mirko Moro, 2010. "On the Use of Subjective Well-Being Data for Environmental Valuation," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 46(3), pages 249-273, July.
  20. MacKerron, George & Mourato, Susana, 2009. "Life satisfaction and air quality in London," Ecological Economics, Elsevier, vol. 68(5), pages 1441-1453, March.
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  22. Heinz Welsch, 2008. "The Social Costs of Civil Conflict: Evidence from Surveys of Happiness," Kyklos, Wiley Blackwell, vol. 61(2), pages 320-340, 05.
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Citations

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Cited by:
  1. Felix Richter & Malte Steenbeck & Markus Wilhelm, 2012. "Nuclear Accidents and Policy: Notes on Public Perception," Working Papers 045, Chair for Economic Policy, University of Hamburg.
  2. Heinz Welsch & Susana Ferreira, 2014. "Environment, Well-Being, and Experienced Preference," Working Papers V-367-14, University of Oldenburg, Department of Economics, revised May 2014.
  3. Goebel, Jan & Krekel, Christian & Tiefenbach, Tim & Ziebarth, Nicolas R., 2013. "Natural Disaster, Policy Action, and Mental Well-Being: The Case of Fukushima," IZA Discussion Papers 7691, Institute for the Study of Labor (IZA).
  4. Tim Tiefenbach & Florian Kohlbacher, 2013. "Disentangling the Happiness Effects of Natural Disasters: The Mitigating Effects of Charitable Donations," DIJ Working Papers 1305, German Institute for Japanese Studies (DIJ), Business & Economics Section.

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