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

The continuing impact of radiation risk around the Fukushima Dai-Ichi nuclear power plant is assessed through an analysis of prices for housing and land transactions in Fukushima and Miyagi prefectures in the three years following the original tsunami and accident. I find a significant effect of radiation on prices to the extent that a one percentage point rise in radiation levels is associated with approximately 0.063 percentage points drop in housing prices. Given that in some areas radiation levels are over one hundred times larger than the pre-accident measurements, this amounts to an economically significant impact on prices. Based on the hedonic price model and a dose-response model for radiation risk and mortality I estimate a VSL for the average household in the region of 3.5 to 6.2 million Euros. This is not out of line with other VSL estimates for Japan and suggests no specific element of dread or overestimation of risks is present in this context