Dynamic Impact Analysis of the 2011 Great East Japan Earthquake and Tsunami and Fukushima Daiichi Nuclear Disaster on Consumer and Retailer Behavior

Abstract

The catastrophic Great East Japan Earthquake and Tsunami of 2011 not only devastated coastal fisheries in Eastern Japan along the Pacific coast, but also triggered the Fukushima Daiichi nuclear disaster. This disaster has caused major challenges associated with the threat of radioactive contamination of foodstuffs processed around the affected area. After the earthquake, many studies analyzed consumer attitudes regarding food with radioactive contamination, but none analyzed the actual shocks this caused in retail settings. In this article, we investigate how consumers and retailers reacted to wakame, a famous edible seaweed in Japan, grown in the disaster-affected Tohoku region before and after the earthquake. We analyze point of sale (POS) data from 60 supermarkets in the Kanto region (which borders the Tohoku region to the southwest and includes Tokyo), the Kinki region (surrounding Kyoto, and about 500 km from the Tohoku region) and the Kyushu region (western region of Japan, more than 1,000 km from the Tohoku region). In our analysis, we find a significant reduction in sales of Tohoku-grown wakame in both the Kanto and Kyushu regions. This drop in sales did not rebound as quickly as in previous food contamination accidents. In the case of Japanʼs BSE crisis, beef consumption levels started to recover soon after the accident. Retailers did not change the sales price of Tohoku-grown wakame permanently, but many stopped stocking it. In the Kanto region, half a year after the earthquake, the decreased sales of wakame as well as the drop in the number of supermarkets carrying Tohoku-grown wakame had mostly returned to pre-earthquake levels, although prices had increased. In the Kyushu region, however, although there was significant recovery in the handling ratio of Tohoku-grown wakame, no recovery in terms of consumer choice was identified.