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Rare Events and Risk Perception: Evidence from Fukushima Accident

Renaud Coulomb () and Yanos Zylberberg ()

Department of Economics - Working Papers Series from The University of Melbourne

Abstract: We study changes in nuclear-risk perception following the Fukushima nuclear accident of March 2011. Using an exhaustive registry of individual housing transactions in England and Wales between 2007 and 2014, we implement a difference-in-difference strategy and compare housing prices in at-risk areas to areas further away from nuclear sites before and after Fukushima incident. We find a persistent price malus of about 3.5% in response to the Fukushima accident for properties close to nuclear plants. We show evidence that this price malus can be interpreted as a change in nuclear-risk perception. In addition, the price decrease is much larger for high-value properties within neighborhoods, and deprived zones in at-risk areas are more responsive to the accident. We discuss various theoretical channels that could explain these results.

Keywords: Hedonic prices; housing markets; risk perception; nuclear power. (search for similar items in EconPapers)
JEL-codes: D80 Q51 Q53 R21 R23 R31 (search for similar items in EconPapers)
Pages: 47
Date: 2016-03
New Economics Papers: this item is included in nep-ene and nep-rmg
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Citations: View citations in EconPapers (6) Track citations by RSS feed

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