Impact of the Great East Japan Earthquake on Production Loss Using an Inter-Regional Social Accounting Matrix

Abstract

Using an inter-regional social accounting matrix, this chapter estimates the magnitude of production losses in both the disaster-affected and disaster-unaffected regions in Japan caused by production damage to agriculture and fisheries and by the loss of capital stock to the manufacturing industry. In addition, we also examine the cost-effectiveness of recovery support by comparing the initial production loss with that 1 or 2 years after the earthquake. Our estimates show that (1) the production loss caused by damages to agriculture and fisheries were 655.7 billion yen in the disaster-affected region and 2.69 trillion yen in the disaster-unaffected region; (2) the production losses caused by the loss of capital stock to the manufacturing industry were 937.2 billion yen in Fukushima Prefecture and 3.132 trillion yen in the other three disaster-affected prefectures (amounting to 5.9% and 6.0%, respectively, of the gross production value in the economic activity sector in 2005); and (3) 2 years after the disaster, the production loss in the disaster-affected region reduced by 311.4 billion yen, owing to the 2 years’ worth of recovery support for agriculture and fisheries, thereby confirming the cost-effectiveness of this support. However, these estimations are based on the multiplier effect, on the assumption that the halt in production activities caused by the damage persists for 1 year.