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Price shocks in disaster: the Great Kantō Earthquake in Japan,1923

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  • Hunter, Janet
  • Ogasawara, Kota

Abstract

This paper tests the operation of markets in the wake of a sudden exogenous shock in prewar Japan, the Great Kantō Earthquake of 1923. Using a unique monthly wholesale price dataset of provincial cities, we found that the earthquake had a positive impact on the price of rice and timber in the sample cities. Our results also indicate that the wholesale price of rice in cities in the northeast of Japan, which were more closely integrated with the affected region, experienced more significant price rises than those in western Japan. Nevertheless, although further research using retail as opposed to wholesale prices of goods is needed, these preliminary findings suggest that the diffusion of price instability outwards from the affected region was on a lesser scale than might have been expected.

Suggested Citation

  • Hunter, Janet & Ogasawara, Kota, 2016. "Price shocks in disaster: the Great Kantō Earthquake in Japan,1923," LSE Research Online Documents on Economics 68618, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:68618
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    File URL: http://eprints.lse.ac.uk/68618/
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    References listed on IDEAS

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    1. Sen, Amartya, 1983. "Poverty and Famines: An Essay on Entitlement and Deprivation," OUP Catalogue, Oxford University Press, number 9780198284635.
    2. A. Colin Cameron & Jonah B. Gelbach & Douglas L. Miller, 2008. "Bootstrap-Based Improvements for Inference with Clustered Errors," The Review of Economics and Statistics, MIT Press, vol. 90(3), pages 414-427, August.
    3. Toya, Hideki & Skidmore, Mark, 2007. "Economic development and the impacts of natural disasters," Economics Letters, Elsevier, vol. 94(1), pages 20-25, January.
    4. Pereira, Alvaro S., 2009. "The Opportunity of a Disaster: The Economic Impact of the 1755 Lisbon Earthquake," The Journal of Economic History, Cambridge University Press, vol. 69(2), pages 466-499, June.
    5. Hunter, Janet, 2014. ""Extreme confusion and disorder"? the Japanese economy in the great Kantō earthquake of 1923," LSE Research Online Documents on Economics 57693, London School of Economics and Political Science, LSE Library.
    6. Choi, In, 2001. "Unit root tests for panel data," Journal of International Money and Finance, Elsevier, vol. 20(2), pages 249-272, April.
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    More about this item

    Keywords

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    JEL classification:

    • N15 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Asia including Middle East
    • N35 - Economic History - - Labor and Consumers, Demography, Education, Health, Welfare, Income, Wealth, Religion, and Philanthropy - - - Asia including Middle East
    • N45 - Economic History - - Government, War, Law, International Relations, and Regulation - - - Asia including Middle East
    • N95 - Economic History - - Regional and Urban History - - - Asia including Middle East
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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