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Rare Events and Risk Perception: Evidence from Fukushima Accident

Author

Listed:
  • Renaud Coulomb

    () (University of Melbourne)

  • Yanos Zylberberg

    (Bristol University)

Abstract

We study changes in nuclear-risk perception following the Fukushima nuclear accident of March 2011. Using an exhaustive registry of individual housing transactions in England and Wales between 2007 and 2014, we implement a difference-in-difference strategy and compare housing prices in at-risk areas to areas further away from nuclear sites before and after Fukushima incident. We find a persistent price malus of about 3.5% in response to the Fukushima accident for properties close to nuclear plants. We show evidence that this price malus can be interpreted as a change in nuclear-risk perception. In addition, the price decrease is much larger for high-value properties within neighborhoods, and deprived zones in at-risk areas are more responsive to the accident. We discuss various theoretical channels that could explain these results.

Suggested Citation

  • Renaud Coulomb & Yanos Zylberberg, 2016. "Rare Events and Risk Perception: Evidence from Fukushima Accident," Department of Economics - Working Papers Series 2020, The University of Melbourne.
    • Handle: RePEc:mlb:wpaper:2020
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    References listed on IDEAS

    as
    1. Luc Anselin & Nancy Lozano-Gracia, 2008. "Errors in variables and spatial effects in hedonic house price models of ambient air quality," Empirical Economics, Springer, vol. 34(1), pages 5-34, February.
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    3. Lucija Muehlenbachs & Elisheba Spiller & Christopher Timmins, 2015. "The Housing Market Impacts of Shale Gas Development," American Economic Review, American Economic Association, vol. 105(12), pages 3633-3659, December.
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    7. Poortinga, Wouter & Aoyagi, Midori & Pidgeon, Nick F., 2013. "Public perceptions of climate change and energy futures before and after the Fukushima accident: A comparison between Britain and Japan," Energy Policy, Elsevier, vol. 62(C), pages 1204-1211.
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    Cited by:

    1. Steve Gibbons & Stephan Heblich & Esther Lho & Christopher Timmins, 2016. "Fear of Fracking? The Impact of the Shale Gas Exploration on House Prices in Britain," SERC Discussion Papers 0207, Spatial Economics Research Centre, LSE.
    2. Huhtala, Anni & Remes, Piia, 2017. "Quantifying the social costs of nuclear energy: Perceived risk of accident at nuclear power plants," Energy Policy, Elsevier, vol. 105(C), pages 320-331.
    3. Anastasios Evgenidis & Masashige Hamano & Wessel N. Vermeulen, 2020. "Economic consequences of follow-up disasters: lessons from the 2011 Great East Japan Earthquake," Working Papers e152, Tokyo Center for Economic Research.
    4. Kawaguchi, Daiji & Yukutake, Norifumi, 2017. "Estimating the residential land damage of the Fukushima nuclear accident," Journal of Urban Economics, Elsevier, vol. 99(C), pages 148-160.
    5. Masashige Hamano & Wessel N. Vermeulen, 2017. "Adapting to within-country export barriers: Evidence from the Japan 2011 Tsunami," Working Papers 1706, Waseda University, Faculty of Political Science and Economics.

    More about this item

    Keywords

    Hedonic prices; housing markets; risk perception; nuclear power.;

    JEL classification:

    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R23 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Regional Migration; Regional Labor Markets; Population
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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