||How Do Agricultural Markets Respond to Radiation Risk?: Evidence from the 2011 Disaster in Japan
Tajima, Kayo ,
Yamamoto, MasashiIchinose, Daisuke
Working Paper, No.299, 2016.02.08, Faculty of economics, university of toyama
30 , 2016-02-08 , Faculty of economics, university of toyama
Since the explosion of the Fukushima Daiichi Nuclear Power Plant in March 2011, public anxiety surrounding the radioactive contamination of food and the environment has become widespread. This article examines how the price of vegetables in the Tokyo Metropolitan Central Wholesale Market was impacted in the wake of the nuclear accident. This study exploits the quasi-experimental condition generated by this accident to test the market price change using monthly panel data on the price of six types of fresh vegetable from each of the 47 prefectures in Japan. Our estimation results show that the price of vegetables grown in Fukushima Prefecture was discounted by 10 - 38 % after the disaster compared to the counter-factual estimates in the absence of a perceived radiation risk. This effect has persisted even after radioactive detection tests showed negative results in subsequent years. Consumer behavior of avoiding purchasing vegetables from Fukushima and instead buying vegetables grown in other areas may explain the price gap.