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The local economic impacts of mega nuclear accident: A synthetic control analysis of Fukushima

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  • Zheng, Shanshan
  • Wang, Derek D.

Abstract

The economic impacts of mega accidents are complex, and accurately quantifying these impacts poses a formidable challenge. Traditional methods often fall short in capturing the extensive consequences of such infrequent disasters, which may go beyond immediate damages to include long-term economic disruptions and indirect costs. This study sheds a light on the economic aftermath of the Fukushima nuclear disaster. Utilizing the synthetic control method (SCM), our analysis reveals a significant, albeit temporary, downturn in the economic performance of the affected region. Specifically, the prefectural per capita income of Fukushima declines by up to 14.4% in the two years following the disaster. This decrease is linked to the composition of Fukushima's GDP and a reduction in labor supply. Our findings demonstrate the effectiveness of SCM as a potent tool for performing counterfactual analyses of mega accidents, offering essential insights into their economic impacts and the pathways to recovery.

Suggested Citation

  • Zheng, Shanshan & Wang, Derek D., 2024. "The local economic impacts of mega nuclear accident: A synthetic control analysis of Fukushima," Economic Modelling, Elsevier, vol. 136(C).
    • Handle: RePEc:eee:ecmode:v:136:y:2024:i:c:s026499932400107x
    DOI: 10.1016/j.econmod.2024.106751
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