Trust and Happiness: Comparative Study Before and After the Great East Japan Earthquake

28 Pages Posted: 4 Jul 2014

See all articles by Eiji Yamamura

Eiji Yamamura

Seinan Gakuin University

Yoshiro Tsutsui

Osaka University - Graduate School of Economics

Chisako Yamane

Okayama Shoka University

Shoko Yamane

Kinki University

Nattavudh Powdthavee

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP)

Date Written: July 4, 2014

Abstract

The positive relationship between trust and happiness has been demonstrated by the literature. However, it is not clear how much this relationship depends on environmental conditions. The Great East Japan Earthquake of 2011 is considered one of the most catastrophic events in human history. This disaster caused not only physical damage for Japanese people, but also perceived damage. Using individual-level panel data from Japan covering the period 2009-2012, this paper attempts to probe how the relationship between trust and happiness was influenced by the Great East Japan Earthquake by comparing the same individuals before and after the earthquake. A fixed-effects estimation showed that there is a statistically well-determined positive relationship between trust and happiness and this relationship was strengthened by disaster, especially for residents in the damaged area. We argue that social trust is a substitute for formal institutions and markets, which mitigates the effect of disaster-related shock on psychological conditions such as happiness. Therefore, a trustful society is invulnerable to a gigantic disaster.

Keywords: Trust, Happiness, Disaster, Great East Japan Earthquake

JEL Classification: Q54, Z13

Suggested Citation

Yamamura, Eiji and Tsutsui, Yoshiro and Yamane, Chisako and Yamane, Shoko and Powdthavee, Nattavudh, Trust and Happiness: Comparative Study Before and After the Great East Japan Earthquake (July 4, 2014). ISER Discussion Paper No. 904. Available at SSRN: https://ssrn.com/abstract=2462352

Eiji Yamamura (Contact Author)

Seinan Gakuin University ( email )

6-2-92 Nishijin
Sawara-ku
Fukuoka 814-8511
Japan

Yoshiro Tsutsui

Osaka University - Graduate School of Economics ( email )

1-7 Machikaneyama
Toyonaka, 560-0043
Japan

Chisako Yamane

Okayama Shoka University ( email )

2-10-1 Tsushima Kyomachi Kitaku
Okayama, 700-8601
Japan

Shoko Yamane

Kinki University ( email )

Higashi-Osaka City, Osaka 577-8502
United States

Nattavudh Powdthavee

London School of Economics & Political Science (LSE) - Centre for Economic Performance (CEP) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44(0)7990815924 (Phone)

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