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Natural disasters and social capital formation: The impact of the Great Hanshin-Awaji earthquake

  • Eiji Yamamura

The Great Hanshin-Awaji (Kobe) earthquake struck Japan in 1995, causing devastating damage to the economic landscape of south-central Japan. The earthquake also caused people to realize the importance of social capital in Japan. Based on a large, individual-level database comprising 488,223 observations, this study investigated how, and the extent to which, the earthquake enhanced the investment in social capital through participation in community activity. The differences-in-differences method was used, and the following key findings were obtained: (1) In Japan, people were more likely to invest in social capital in 1996 than in 1991, (2) the effects of the earthquake decreased as the distance of one’s place of residence increased from Kobe, and (3) the earthquake significantly increased the social capital investment rate of Kobe residents, whereas it had no significant influence on the investment rate of residents of large cities close to Kobe.

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Paper provided by Economics and Econometrics Research Institute (EERI), Brussels in its series EERI Research Paper Series with number EERI RP 2013/10.

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Date of creation: 10 Sep 2013
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Handle: RePEc:eei:rpaper:eeri_rp_2013_10
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  1. Leigh, Andrew, 2006. "Does equality lead to fraternity?," Economics Letters, Elsevier, vol. 93(1), pages 121-125, October.
  2. Yamamura, Eiji, 2012. "Social capital, household income, and preferences for income redistribution," European Journal of Political Economy, Elsevier, vol. 28(4), pages 498-511.
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  4. Yasuyuki Sawada & Satoshi Shimizutani, 2008. "How Do People Cope with Natural Disasters? Evidence from the Great Hanshin-Awaji (Kobe) Earthquake in 1995," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(2-3), pages 463-488, 03.
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  7. Eiji Yamamura, 2013. "Natural Disasters and Participation in Volunteer Activities: A Case Study of the Great Hanshin-Awaji Earthquake," Annals of Public and Cooperative Economics, Wiley Blackwell, vol. 84(1), pages 103-117, 03.
  8. Denice DiPasquale & Edward L. Glaeser, 1997. "Incentives and Social Capital: Are Homeowners Better Citizens?," Harvard Institute of Economic Research Working Papers 1815, Harvard - Institute of Economic Research.
  9. Yamamura, Eiji, 2010. "The role of social trust in reducing long-term truancy and forming human capital in Japan," MPRA Paper 23759, University Library of Munich, Germany.
  10. Gustavsson, Magnus & Jordahl, Henrik, 2008. "Inequality and trust in Sweden: Some inequalities are more harmful than others," Journal of Public Economics, Elsevier, vol. 92(1-2), pages 348-365, February.
  11. Berggren, Niclas & Jordahl, Henrik, 2005. "Free to Trust? Economic Freedom and Social Capital," Working Paper Series 2005:2, Uppsala University, Department of Economics.
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  14. yamamura, eiji, 2009. "Effects of interactions among social capital, income, and learning from experiences of natural disasters: A case study from Japan," MPRA Paper 16223, University Library of Munich, Germany.
  15. Marcel Fafchamps, 2006. "Development and social capital," Journal of Development Studies, Taylor & Francis Journals, vol. 42(7), pages 1180-1198.
  16. Andrés, Antonio R. & Halicioglu, Ferda & Yamamura, Eiji, 2011. "Socio-economic determinants of suicide in Japan," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(6), pages 723-731.
  17. Edward L. Glaeser & David Laibson & Bruce Sacerdote, 2002. "An Economic Approach to Social Capital," Economic Journal, Royal Economic Society, vol. 112(483), pages 437-458, November.
  18. Toya, Hideki & Skidmore, Mark, 2007. "Economic development and the impacts of natural disasters," Economics Letters, Elsevier, vol. 94(1), pages 20-25, January.
  19. 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.
  20. Sawada, Yasuyuki, 2006. "The Impact of Natural and Manmade Disasters on Household Welfare," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25750, International Association of Agricultural Economists.
  21. Yamamura, Eiji, 2011. "Comparison of the effects of homeownership by individuals and their neighbors on social capital formation: Evidence from Japanese General Social Surveys," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 40(5), pages 637-644.
  22. Mark Skidmore & Hideki Toya, 2002. "Do Natural Disasters Promote Long-Run Growth?," Economic Inquiry, Western Economic Association International, vol. 40(4), pages 664-687, October.
  23. Yasuyuki Sawada & Satoshi Shimizutani, 2007. "Consumption insurance against natural disasters: evidence from the Great Hanshin-Awaji (Kobe) earthquake," Applied Economics Letters, Taylor & Francis Journals, vol. 14(4), pages 303-306.
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