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

27 Pages Posted: 16 Aug 2013

See all articles by Thomas K. Bauer

Thomas K. Bauer

Rhine-Westphalia Institute for Economic Research (RWI-Essen); University of Bochum - Faculty of Economics; IZA Institute of Labor Economics

Sebastian Braun

Kiel Institute for the World Economy - IFW

Michael Kvasnicka

RWI Essen (Berlin Office)

Date Written: July 1, 2013

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

Suggested Citation

Bauer, Thomas K. and Braun, Sebastian Till and Kvasnicka, Michael, Distant Event, Local Effects? Fukushima and the German Housing Market (July 1, 2013). Ruhr Economic Paper No. 433. Available at SSRN: https://ssrn.com/abstract=2309980 or http://dx.doi.org/10.2139/ssrn.2309980

Thomas K. Bauer

Rhine-Westphalia Institute for Economic Research (RWI-Essen) ( email )

Hohenzollernstr. 1-3
Essen, 45128
Germany
+49 201 8149 264 (Phone)
+49 201 8149 284 (Fax)

HOME PAGE: http://www.rwi-essen.de

University of Bochum - Faculty of Economics ( email )

Universitätsstraße 150
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D-44780 Bochum
Germany
+02 34 32 28341 (Phone)
+02 34 32 14273 (Fax)

HOME PAGE: http://www.ruhr-uni-bochum.de/empwifo/

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany
+49 228 38 94 529 (Phone)
+49 228 38 94 510 (Fax)

Sebastian Till Braun

Kiel Institute for the World Economy - IFW ( email )

United States

Michael Kvasnicka (Contact Author)

RWI Essen (Berlin Office) ( email )

Hohenzollernstr. 1-3
Berlin, 45128
Germany

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