Price shocks in regional markets: Japan's great Kantō Earthquake of 1923

Janet Hunter and Kota Ogasawara

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: Japan’s Great Kantō Earthquake of September 1st 1923 devastated the area around Tokyo and the country’s main port of Yokohama. This paper uses the earthquake as a case study to inform our understanding of the economics of disasters and the history of market integration. It seeks to test two main assumptions: firstly, that shifting demand and supply curves consequent on a disaster will have some impact on prices; and secondly, that any local changes in the disaster region are likely to be diffused across a wider geographical area. We make use of a unique monthly wholesale price dataset for a number of cities across Japan, and our analysis suggests three main findings: that price changes in the affected areas immediately following the disaster were in most cases reflected in price changes in Japan’s provincial cities; that cities further away from the devastation witnessed smaller price changes than those nearer to the affected area; and that the observed pattern of price changes reflects the regional heterogeneity identified by scholars who have worked on market integration in Japan.

JEL-codes: F3 G3 N0 (search for similar items in EconPapers)
Date: 2018-11-25
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Published in Economic History Review, 25, November, 2018. ISSN: 0013-0117

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http://eprints.lse.ac.uk/88348/ Open access version. (application/pdf)

Related works:
Journal Article: Price shocks in regional markets: Japan's Great Kantō Earthquake of 1923 (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:88348

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