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How shaky was the regional economy after the 1995 Kobe earthquake? A multiplicative decomposition analysis of disaster impact

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  • Yasuhide Okuyama

Abstract

The long-run effects of the 1995 Kobe earthquake have been studied in various papers (Chang in Disasters 34(2):303–327, 2010 ; DuPont and Noy in Econ Dev Cult Change, 2015 ; Okuyama in Singap Econ Rev, 2015 ), and their findings have revealed the continuous and significantly negative economic trend in Kobe, suggesting that considerable structural changes occurred in the Kobe economy resulting from the damages from and subsequent reconstruction activities after the earthquake. At the same time, Fujiki and Hsiao (Disentangling the effects of multiple treatments—measuring the net economic impact of the 1995 Great Hanshin-Awaji Earthquake. IMES Discussion Paper 2013-E-3. Institute for Monetary and Economic Studies, Bank of Japan, 2013 ) concluded that the effects from the event were only short-lived and the persistent decline of the Hyogo economy had come from structural change of the economy. In order to investigate the disaster-induced structural changes further, this paper aimed to analyze the extent to and the composition of the structural change, based on the input–output framework. While the previous study (Okuyama in Econ Syst Res 26(1):98–117, 2014 ) lacked the 1995 data and was inclined toward a longer-run analysis, this paper examined immediate structural changes after the event employing the estimated 1995 input–output tables for the damaged region based on the observed macroeconomic data and with a set of different assumptions (Ashiya and Jinushi in Kokumin Keizai Zasshi 183(1):79–97, 2001 ). The results show that the significant structural changes were observed in the damaged region and that many manufacturing sectors tightened the regional interindustry linkages, whereas service sectors weakened their regional linkages in the aftermath. In addition, the assumptions of how the reconstruction demands would have been leaked out appear to make some critical differences in the results. Copyright Springer-Verlag Berlin Heidelberg 2015

Suggested Citation

  • 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.
    • Handle: RePEc:spr:anresc:v:55:y:2015:i:2:p:289-312
    DOI: 10.1007/s00168-015-0691-z
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    More about this item

    Keywords

    C67; Q54; R11;
    All these keywords.

    JEL classification:

    • C67 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Input-Output Models
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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