The Damage and Reconstruction of the Kumamoto Earthquake: An Analysis on the Impact of Changes in Expenditures with Multi-Regional
Input-Output Table for Kumamoto Prefecture
WIFO Research Seminar, Österreichisches Institut für Wirtschaftsforschung, Wien, 07.09.2022 12:30
Veranstalter: Österreichisches Institut für Wirtschaftsforschung
Online seit: 26.08.2022 0:00
The Kumamoto earthquake which occurred in April 2016 measured twice the maximum seismic intensity of 7, causing serious damage
to the Kumamoto prefecture. This study mainly focuses on the demand side of expenditures and analyses the ripple effects of
changes due to the earthquake using the multi-regional input-output table in the Kumamoto Prefecture. Expenditures in the
prefecture in fiscal year 2016 by month decreased by a cumulative total of 592 billion yen because of the earthquake, which
generated a value-added loss of 384 billion yen. On the other hand, expenditures increased by a cumulative total of 648 billion
yen caused by reconstruction demand, inducing 375 billion yen in value-added gains. Thus, net increase of the value-added
of 27 billion yen occupied 10.9 percent of net increase of the gross prefectural domestic product between fiscal years 2015-16.
The fluctuation of expenditures, induced production, and induced value-added caused by the earthquake is huge. Although the
damage to the prefectural economy was severe, reconstruction demand exceeded it, resulting in a quick recovery. However, at
the same time, there was a confirmed delay in restoration in industries that were almost unrelated to reconstruction and in
regions with a heavy concentration of damage.