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Disentangling the effects of multiple treatments—Measuring the net economic impact of the 1995 great Hanshin-Awaji earthquake

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  • Fujiki, Hiroshi
  • Hsiao, Cheng

Abstract

We propose a panel data approach to disentangle the impact of “one treatment” from the “other treatment” when the observed outcomes are subject to both treatments. We use the Great Hanshin-Awaji earthquake that took place on January 17, 1995 to illustrate our methodology. We find that there were no persistent earthquake effects. The observed persistent effects are due to structural change in Hyogo prefecture.

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  • Fujiki, Hiroshi & Hsiao, Cheng, 2015. "Disentangling the effects of multiple treatments—Measuring the net economic impact of the 1995 great Hanshin-Awaji earthquake," Journal of Econometrics, Elsevier, vol. 186(1), pages 66-73.
    • Handle: RePEc:eee:econom:v:186:y:2015:i:1:p:66-73
    DOI: 10.1016/j.jeconom.2014.10.010
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    11. Fujiki, Hiroshi & Hsiao, Cheng, 2015. "Disentangling the effects of multiple treatments—Measuring the net economic impact of the 1995 great Hanshin-Awaji earthquake," Journal of Econometrics, Elsevier, vol. 186(1), pages 66-73.
    12. Newey, Whitney & West, Kenneth, 2014. "A simple, positive semi-definite, heteroscedasticity and autocorrelation consistent covariance matrix," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 33(1), pages 125-132.
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    1. William duPont IV & Ilan Noy & Yoko Okuyama & Yasuyuki Sawada, 2015. "The Long-Run Socio-Economic Consequences of a Large Disaster: The 1995 Earthquake in Kobe," PLOS ONE, Public Library of Science, vol. 10(10), pages 1-17, October.
    2. I. Koetsier, 2017. "The fiscal impact of natural disasters," Working Papers 17-17, Utrecht School of Economics.
    3. Hongjun Li & Zheng Li & Cheng Hsiao, 2023. "Assessing the impacts of pandemic and the increase in minimum down payment rate on Shanghai housing prices," Empirical Economics, Springer, vol. 64(6), pages 2661-2682, June.
    4. Massimiliano Mazzanti & Antonio Musolesi, 2020. "Modeling Green Knowledge Production and Environmental Policies with Semiparametric Panel Data Regression models," SEEDS Working Papers 1420, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Sep 2020.
    5. Yan Song & Zhenran Li & Xiao Zhang & Ming Zhang, 2021. "Study on indirect economic impacts and their causes of the 2008 Wenchuan earthquake," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 108(2), pages 1971-1995, September.
    6. Zeqin Liu & Zongwu Cai & Ying Fang & Ming Lin, 2019. "Statistical Analysis and Evaluation of Macroeconomic Policies: A Selective Review," WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS 201904, University of Kansas, Department of Economics, revised Mar 2019.
    7. Huang, Lulu & Liu, Qiannan & Tang, Yugang, 2024. "Long-term economic impact of disasters: Evidence from multiple earthquakes in China," World Development, Elsevier, vol. 174(C).
    8. Yasuhide Okuyama, 2015. "How shaky was the regional economy after the 1995 Kobe earthquake? A multiplicative decomposition analysis of disaster impact," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 55(2), pages 289-312, December.
    9. Carlos Viana de Carvalho & Ricardo Masini & Marcelo Cunha Medeiros, 2016. "The perils of Counterfactual Analysis with Integrated Processes," Textos para discussão 654, Department of Economics PUC-Rio (Brazil).
    10. Fujiki, Hiroshi & Hsiao, Cheng, 2015. "Disentangling the effects of multiple treatments—Measuring the net economic impact of the 1995 great Hanshin-Awaji earthquake," Journal of Econometrics, Elsevier, vol. 186(1), pages 66-73.
    11. Pengyu Chen, 2022. "Analysis of the post-earthquake economic recovery of the most severely affected areas in the 2008 Wenchuan earthquake," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 114(3), pages 2633-2655, December.
    12. Hao, Shiming, 2021. "True structure change, spurious treatment effect? A novel approach to disentangle treatment effects from structure changes," MPRA Paper 108679, University Library of Munich, Germany.
    13. Li, Xingyu & Shen, Yan & Zhou, Qiankun, 2024. "Confidence intervals of treatment effects in panel data models with interactive fixed effects," Journal of Econometrics, Elsevier, vol. 240(1).
    14. Carvalho, Carlos & Masini, Ricardo & Medeiros, Marcelo C., 2018. "ArCo: An artificial counterfactual approach for high-dimensional panel time-series data," Journal of Econometrics, Elsevier, vol. 207(2), pages 352-380.
    15. Massimiliano Mazzanti & Antonio Musolesi, 2020. "A Semiparametric Analysis of Green Inventions and Environmental Policies," SEEDS Working Papers 0920, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jun 2020.
    16. William duPont IV & Ilan Noy, 2015. "What Happened to Kobe? A Reassessment of the Impact of the 1995 Earthquake in Japan," Economic Development and Cultural Change, University of Chicago Press, vol. 63(4), pages 777-812.
    17. Cuong Nguyen & Ilan Noy & Dag Einar Sommervoll & Fang Yao, 2020. "Redrawing of a Housing Market: Insurance Payouts and Housing Market Recovery in the Wake of the Christchurch Earthquake of 2011," CESifo Working Paper Series 8560, CESifo.
    18. Cuong Nguyen & Ilan Noy & Dag Einar Sommervoll & Fang Yao, 2023. "Settling insurance claims with cash or repair and housing market recovery after an earthquake," Economics of Disasters and Climate Change, Springer, vol. 7(1), pages 117-134, March.
    19. Li, Xiao & Qiao, Yuanbo & Shi, Lei, 2019. "Has China's war on pollution slowed the growth of its manufacturing and by how much? Evidence from the Clean Air Action," China Economic Review, Elsevier, vol. 53(C), pages 271-289.

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    More about this item

    Keywords

    Multiple treatment effects; Panel data; Great Hanshin-Awaji earthquake; natural disaster; measurement without theory;
    All these keywords.

    JEL classification:

    • C18 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Methodolical Issues: General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • C52 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Evaluation, Validation, and Selection

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