Graduation Year

Spring 2013

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts



Reader 1

Latika Chaudhary

Reader 2

Sean Flynn

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© 2012 Misato Suzuki


This paper quantifies and analyzes the economic impact of the Great Tohoku Earthquake and tsunami on the Japanese electricity industry using alternative event study methodology. The data set includes daily stock prices of 11 publicly traded electricity companies. This paper investigates the changes in systematic risk, abnormal returns (ARs), and cumulative abnormal returns (CARs) before and after the natural disaster. In addition, I compare the movement of the stock price in the electricity industry with other indices in Japan to investigate the aggregate level impact on the Japanese economy. By examining the economic impact of the earthquake, this paper provides a visual and a numerical representation of the change in investors’ views on the electricity industry. The results showed no statistically significant changes in ARs in the immediate aftermath of the disaster. On the other hand, statistically significant changes in CARs were found for all 11 electricity companies over an extended period following the disaster. Furthermore, there was a statistically significant increase in systematic risk, especially in the nuclear-committed firms. Although the electricity industry was negatively affected, daily stock prices and CARs show that other industries were not as severely affected. These results provide insight to the global economic and the political implication of the disaster.

This thesis is restricted to the Claremont Colleges current faculty, students, and staff.