Distant Event, Local Effects? Fukushima and the German Housing Market

Abstract

The Fukushima Daiichi accident in Japan in March 2011 caused a fundamental change in Germany’s energy policy which led to the immediate shut down of nearly half of its nuclear power plants. This paper uses data from Germany’s largest internet platform for real estate to investigate the effect of Fukushima on the German housing market. Using a difference-in-differences approach, we find that Fukushima reduced house prices near nuclear power plants that were in operation before Fukushima by almost 6%. House prices near sites that were shut down right after the accident even fell by 10.8%. Our results suggest that economic reasons are of prime importance for the observed fall in house prices near nuclear power plants.

Keywords: Fukushima, nuclear power plants, housing prices, Germany

JEL Classification: R31, Q48, Q58