Earthquakes and the quality of life in Japan

Michio Naoi, Kazuto Sumita, Miki Seko

Research output: Contribution to journalArticle

5 Citations (Scopus)

Abstract

Japan is famous for its earthquakes. How do households and firms respond to this potentially devastating risk? How does earthquake risk affect housing costs and wages? To answer these questions, we construct a Quality of Life Index (QOLI) and estimate the social cost of earthquake risk among cities/counties in Japan. The regional QOLI is obtained through estimating the hedonic wage and housing rent regressions using household longitudinal data covering all Japan. From the estimated results, we find that earthquake risk has a significant impact on the overall quality of life in Japanese prefectures, and that there are large city/county differences in terms of the social cost of earthquake risk. Finally, we argue that the large regional variation in the social cost of earthquakes arises from earthquake insurance market imperfections - crude and rough geographical risk rating - and propose a possible remedy for enhancing earthquake insurance risk assessment.

Original languageEnglish
Pages (from-to)313-334
Number of pages22
JournalJournal of Property Research
Volume24
Issue number4
DOIs
Publication statusPublished - 2007 Dec

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quality of life
natural disaster
Japan
earthquake
social costs
wage
insurance
housing
regional difference
large city
rent
risk assessment
remedies
rating
firm
regression
market
costs
cost
social cost

Keywords

  • Earthquake insurance
  • Earthquake risk
  • Quality of life
  • Social costs of earthquake

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Urban Studies

Cite this

Earthquakes and the quality of life in Japan. / Naoi, Michio; Sumita, Kazuto; Seko, Miki.

In: Journal of Property Research, Vol. 24, No. 4, 12.2007, p. 313-334.

Research output: Contribution to journalArticle

Naoi, Michio ; Sumita, Kazuto ; Seko, Miki. / Earthquakes and the quality of life in Japan. In: Journal of Property Research. 2007 ; Vol. 24, No. 4. pp. 313-334.
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