Earthquakes and the quality of life in Japan

Michio Naoi, Kazuto Sumita, Miki Seko

Research output: Contribution to journalArticlepeer-review

10 Citations (Scopus)


Japan is famous for its earthquakes. How do households and firms respond to this potentially devastating risk? How does earthquake risk affect housing costs and wages? To answer these questions, we construct a Quality of Life Index (QOLI) and estimate the social cost of earthquake risk among cities/counties in Japan. The regional QOLI is obtained through estimating the hedonic wage and housing rent regressions using household longitudinal data covering all Japan. From the estimated results, we find that earthquake risk has a significant impact on the overall quality of life in Japanese prefectures, and that there are large city/county differences in terms of the social cost of earthquake risk. Finally, we argue that the large regional variation in the social cost of earthquakes arises from earthquake insurance market imperfections - crude and rough geographical risk rating - and propose a possible remedy for enhancing earthquake insurance risk assessment.

Original languageEnglish
Pages (from-to)313-334
Number of pages22
JournalJournal of Property Research
Issue number4
Publication statusPublished - 2007 Dec


  • Earthquake insurance
  • Earthquake risk
  • Quality of life
  • Social costs of earthquake

ASJC Scopus subject areas

  • Geography, Planning and Development
  • Urban Studies


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