Estimated Costs of Japan’s 2011 Tohoku Earthquake

The March 11, 2011, earthquake off the coast of Japan caused a tsunami with catastrophic impacts. Due to the scale of this combined disaster, we estimate damage costs of $150 billion (12 trillion yen).

This 9.0 magnitude earthquake makes it the 4th largest in world history, and the largest in Japan’s history. The impact was most severe along coastal and inland areas just north and east of Tokyo. The earthquake’s epicenter is 80 miles east of Sendai, Honshu, in the northeastern part of the island nation, and 230 miles northeast of Tokyo, which is centrally located along the island’s eastern shore.

The International Disaster Database in Brussels records 37 earthquakes in Japan between 1901 and 2009, and Table 1 compares the Kobe earthquake (1995) to the others in the past century. Two facts become clear. First, the relationship between deaths and damage costs has changed over time. While before 1980, deaths were high and costs were relatively low, after 1980 the reverse is true. This shift is the direct consequence of economic development (more buildings at higher costs are affected) and improved readiness (improved infrastructure leads to fewer deaths). Second, the 1995 Kobe earthquake is far different than other historical earthquakes, having killed 5,300 people and caused over $60 billion in damages. These two facts are most relevant as we use the historical data to predict the impact of the most recent Tohoku earthquake.

Preliminary data from the Japanese Ministry of Internal Affairs and Communications show 3,500 dead and 7,200 missing from recent earthquake as of March 19. A significant share of those reported missing will likely turn up dead. This and other evidence suggest that this most recent earthquake will be as deadly and as expensive as the Kobe earthquake. The last line of Table 1 reports our death and damage estimates, based on data published by the Japanese government as of March 19.  We are aware that other sources are now reporting higher fatality numbers and we will continue to monitor and refine our projections as these numbers are confirmed.

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