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Trust and Happiness: Comparative Study Before and After the Great East Japan Earthquake

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Abstract

The positive relationship between trust and happiness has been demonstrated by the literature. However, it is not clear how much this relationship depends on environmental conditions. The Great East Japan Earthquake of 2011 is considered one of the most catastrophic events in human history. This disaster caused not only physical damage for Japanese people, but also perceived damage. Using individual-level panel data from Japan covering the period 2009–2012, this paper attempts to probe how the relationship between trust and happiness was influenced by the Great East Japan Earthquake by comparing the same individuals before and after the earthquake. A fixed-effects estimation showed that there is a statistically well-determined positive relationship between trust and happiness and this relationship was strengthened by disaster, especially for residents in the damaged area. We argue that social trust is a substitute for formal institutions and markets, which mitigates the effect of disaster-related shock on psychological conditions such as happiness. Therefore, a trustful society is invulnerable to a gigantic disaster.

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Notes

  1. In some situations, crowding may produce positive emotions, but exposure to crowding has been shown to be detrimental to well-being (Novelli et al. 2013). There are myths about disasters that say collective behavior in emergencies is maladaptive, irrational, and even pathological (Drury et al. 2013a). Whether the myth is true has not been examined sufficiently. In responses to emergency situations, it is important to consider whether crowd behavior leads to mass panic or collective resilience (Drury et al. 2013a, b).

  2. We are not the first group of economists to study the impact of natural disasters. Several economists have investigated the impact of disasters on modern society (e.g., Skidmore and Toya 2002; Anbarci et al. 2005; Eisensee and Strömberg 2007; Kellenberg and Mobarak 2008; Becchetti and Castriota 2010; Sawada and Shimizutani 2007, 2008, 2011). Some economists have noted that social capital played a crucial role in mitigating damage or recovering from the disaster (Yamamura 2010; Aldrich 2012).

  3. Ram (2009) did not find a significant association between trust and happiness.

  4. An unexpected catastrophe such as a terrorist attack was also found to result in higher levels of mental distress (Metcalfe et al. 2011). The suicide rate is considered an objective variable for capturing the degree of life satisfaction in society. Matsubayashi et al. (Matsubayashi et al. 2013) examined the relationship between disaster and suicide rates.

  5. Ono (2012) pointed out that interpersonal networks are effective and play an important role in deterring rioting and turmoil in the stricken areas affected by the Great East Japan Earthquake.

  6. The material loss of building and road infrastructure was calculated as 31.8 and 2.1 million tons, respectively (Tanikawa et al. 2014). The “World Bank and Japanese government say that there’s somewhere between $122 billion and $235 billion worth of damage to clean up” (Hammer 2011:28).

  7. A Japanese prefecture is almost the equivalent of a state in the United States or a province in Canada. There are 47 prefectures in Japan.

  8. Sendai is regarded as the most urbanized city in northeastern Japan and has a population of over a million people.

  9. The data are available from the website of the Statistics Bureau of the Ministry of Internal Affairs and Communications. http://www.e-stat.go.jp/SG1/estat/NewList.do?tid=000000090001 (accessed on June 9, 2014).

  10. In preparation for events such as mass decontamination, it is important to facilitate clear communication with members of the public (Carter et al. 2013).

  11. The GCOE data provide information about the name of the prefecture and the size of the local government where the respondents resided. A prefecture consists of local governments, including many cities, towns, and villages.

  12. It should be noted that this paper checks only the correlation between trust and happiness although there seems to be reverse causality and therefore endogenous bias. The instrumental variables must be used to control for this bias (Kuroki 2011). However, this is beyond the scope of this paper because the appropriate instruments cannot be obtained.

  13. Evaluation in US dollars is calculated based on the average foreign exchange rate in 2011. This method was also applied in the other parts to evaluate the effect of trust.

  14. Analysis using US data found that life events such as being widowed or marital separation would make it necessary to provide an individual with US $100,000 extra per annum (Blanchflower and Oswald 2004:1373).

  15. In monetary terms, approximately US $300,000 compensates for the gap in happiness between married and unmarried people, which is equivalent to the UK (Powdthavee Powdthavee 2010:88).

  16. Existing works also provided evidence that the effect of divorce (or death of spouses) on happiness is not persistent several years after the event (e.g., Oswald and Powdthavee 2008; Clark et al. 2008; Frijters et al. 2011).

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Acknowledgments

This research uses microdata from the Preference Parameters Study of Osaka University’s twenty-first Century GCOE program, Behavioral Macrodynamics based on Surveys and Experiments, and its GCOE project, Human Behavior and Socioeconomic Dynamics. We acknowledge the contribution from the program and project contributors: Yoshiro Tsutsui, Fumio Ohtake, and Shinsuke Ikeda. The first author gratefully acknowledges financial support in the form of research grants from the Japan Center for Economic Research as well as the Japanese Society for the Promotion of Science (Foundation C 20368971). The first author also wishes to acknowledge the financial support of the Kikawada Foundation.

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Authors and Affiliations

  1. Seinan Gakuin University, 6-2-92, Nishijin Sawara-ku, Fukuoka, 814-8511, Japan

    Eiji Yamamura

  2. Faculty of Economics, Konan University, 8-9-1 Okamoto Higashinada-ku, Kobe, 658-8501, Japan

    Yoshiro Tsutsui

  3. Okayama Shoka University, 2-10-1 Tsushima Kyomachi Kitaku, Okayama, 700-8601, Japan

    Chisako Yamane

  4. Kindai University, 3-4-1 Kowakae Higashi-osaka, Osaka, 577-8502, Japan

    Shoko Yamane

  5. CEP, London School of Economics, London, UK

    Nattavudh Powdthavee

  6. MIAESR, University of Melbourne, Melbourne, Australia

    Nattavudh Powdthavee

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  1. Eiji Yamamura
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Correspondence to Eiji Yamamura.

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Yamamura, E., Tsutsui, Y., Yamane, C. et al. Trust and Happiness: Comparative Study Before and After the Great East Japan Earthquake. Soc Indic Res 123, 919–935 (2015). https://doi.org/10.1007/s11205-014-0767-7

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