Market Integration Analysis of Japan’s Wakame Seaweed Market Before and After the Great East Japan Earthquake

The 2011 Japanese earthquake had a major impact on markets for seafood products. As such, this study investigates its effect on the price of a brand of wakame seaweed produced in Sanriku, an area hit hard by tsunamis. Using monthly data on Sanriku wakame prices at retail stores in 10 regions of Japan from 2005 to 2014, we undertake cointegration analysis to explore the effect of reputational damage due to radioactive contamination and changes in domestic market dynamics. Market integration analysis reveals that the market changed after the earthquake. Before the earthquake, markets in eastern Japan were leading those in the west. However, after the earthquake, markets in the east were integrated and mutually influenced one another. The earthquake also resulted in diversified distribution channels and complicated regional relationships because buyers constructed their own channels for purchasing wakame during the earthquake