Scandinavian Working Papers in Economics

Working Paper Series,
Uppsala University, Department of Economics

No 2013:3: Estimating the effects of nuclear power facilities on local income levels: A quasi-experimental approach

Michihito Ando ()
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Michihito Ando: Department of Economics, Postal: Uppsala University, P.O. Box 513, SE-751 20 Uppsala, Sweden

Abstract: This paper studies how the establishment of Nuclear Power Facilities (NPF) in the 1970s and 1980s has affected local per capita income levels in NPF-located municipalities in Japan by using the synthetic control method (SCM). Eight quantitative case studies using the SCM clarify that the effects of NPF establishment on per capita taxable income levels are highly heterogeneous, but often economically meaningful and in some cases huge: an 11 % increase on average, a 62 % increase in Rokkasho village in 2002 and a 30 % increase in Tomioka town in 2002. On the other hand, a few NPF-located municipalities receive weak or negligible effects from NPF establishment. I also examine the statistical significance of individual treatment effects with several placebo tests and find that the treatment effects of 4 out of the 8 NPF locations are larger than 95% of placebo effects.

Keywords: local economic growth; nuclear power facilities; synthetic control method

JEL-codes: H71; O18; R53

44 pages, January 27, 2013

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