Dreams of Urbanization: Quantitative Case Studies on the Local Impacts of Nuclear Power Facilities Using the Synthetic Control Method

56 Pages Posted: 1 Nov 2014 Last revised: 30 Jan 2015

Date Written: October 28, 2014

Abstract

This paper uses the synthetic control (SC) method to examine how the establishment of Nuclear Power Facilities (NPFs) in Japan in the 1970s and 1980s has affected local per capita income levels in the municipalities in which they were located (NPF municipalities). Eight quantitative case studies using the SC method clarify that the effects of NPF establishment on per capita taxable income levels are highly heterogeneous. The estimated effects are often economically meaningful and in some cases huge: the income level was 11% higher on average and 62% higher in one municipality in 2002 when compared with counterfactual units. On the other hand a few of the NPF municipalities have received only weak or negligible effects from NPF establishment. The post-estimation comparisons of employment between the NPF municipalities and the SC units suggest that the size of the direct labor demand shocks and subsequent indirect employment effects on nontradable service sectors have contributed to the increase in per capita income levels.

Keywords: local income growth, local employment, nuclear power facilities, synthetic control method, quantitative case study

JEL Classification: H71, O18, R38, R53

Suggested Citation

Ando, Michihito, Dreams of Urbanization: Quantitative Case Studies on the Local Impacts of Nuclear Power Facilities Using the Synthetic Control Method (October 28, 2014). Journal of Urban Economics, Volume 85, January 2015, pages 68-85, Available at SSRN: https://ssrn.com/abstract=2517092

Michihito Ando (Contact Author)

Rikkyo University ( email )

3-34-1 Nishi-Ikebukuro
Toshima-ku, Tokyo 171-8501
Japan

HOME PAGE: http://https://sites.google.com/site/michihito7ando/

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