Investigating the impact of the 2011 Great East Japan Earthquake and evaluating the restoration and reconstruction performance

Abstract

Three years have passed since the 2011 Great East Japan Earthquake (GEJE) hit the northeastern part of Japan. The earthquake then triggered a devastating tsunami and a nuclear accident, which in turn created a compound disaster that claimed a large number of human casualties and devastated properties. The 2011 GEJE caused the economy growth to decline by 2.2% with the largest decrease experienced by the industrial sector (−7.1%), followed by the agricultural sector (−3.6%) and the services sector (−0.2%). The agriculture and manufacturing sectors underwent large decreases in growth since the economies of most of the affected prefectures have relied on these two sectors. Thus, by investigating the damaging impacts of the 2011 GEJE, we try to evaluate the restoration and reconstruction performance in the agriculture and manufacturing sectors. Our study finds that there has been significant progress made towards restoration and reconstruction on the areas affected by the disaster. Using prefectural data from 2000 to 2012, we apply econometric methods based upon the bias-corrected least-squares dummy variable to estimate the impact of the 2011 GEJE on the agricultural and manufacturing sectors. From this analysis, two major insights emerged. First, the 2011 GEJE had a significant negative impact on agriculture and manufacturing sectors. On average, the impact on the agriculture sector was higher than on the manufacturing sector about twice as large. Second, the most affected prefectures experienced an impact about three times greater than the less affected prefectures in both agriculture and manufacturing sectors.