Economic Valuation of a Rise in Ambient Radiation Risks: Hedonic Pricing Evidence from the Accident in Fukushima

Abstract

Using a combined data set of radiation levels and property prices from Fukushima and Miyagi prefectures that runs from 2009 to early 2017, the economic impact of radiation from the Fukushima nuclear accident is assessed. A 1 percent rise in radiation is associated with approximately 0.051 percentage drop in housing prices and though the level of radiation falls substantially after 2011, the estimated elasticity is broadly stable. The associated estimate of VSL (value of a statistical life) is in the region of US$4.5–6.4 million, which suggests no strong element of dread or overestimation of risks is present.

Keywords: Fukushima, hedonic pricing, mortality risk, nuclear accident, radiation