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Corporate Incentives and Nuclear Safety*

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Author

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  • Catherine Hausman

Abstract

Following electricity market restructuring, approximately half of all commercial US nuclear power reactors were sold by price-regulated public utilities to independent power producers. At the time of the sales, some policymakers raised concerns that these corporations would ignore safety. Others claimed that the sales would bring improved reactor management, with positive effects on safety. Using data on various safety measures and a difference-in-differences estimation strategy, I find that safety improved following ownership transfers and the removal of price regulations. Generation increased, and this does not appear to have come at the cost of public safety.

Suggested Citation

  • Catherine Hausman, 2014. "Corporate Incentives and Nuclear Safety," American Economic Journal: Economic Policy, American Economic Association, vol. 6(3), pages 178-206, August.
    • Handle: RePEc:aea:aejpol:v:6:y:2014:i:3:p:178-206
    Note: DOI: 10.1257/pol.6.3.178
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    Citations

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    Cited by:

    1. Bizet, Romain & Bonev, Petyo & Lévêque, François, 2022. "The effect of local monitoring on nuclear safety and compliance: Evidence from France," Journal of Environmental Economics and Management, Elsevier, vol. 113(C).
    2. Richard T. Boylan, 2016. "Power to the People: Does Ownership Type Influence Electricity Service?," Journal of Law and Economics, University of Chicago Press, vol. 59(2), pages 441-476.
    3. Sven-Olof Fridolfsson and Thomas P. Tangeras, 2015. "Nuclear Capacity Auctions," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    4. Adler, David B. & Jha, Akshaya & Severnini, Edson, 2020. "Considering the nuclear option: Hidden benefits and social costs of nuclear power in the U.S. since 1970," Resource and Energy Economics, Elsevier, vol. 59(C).
    5. Lange, Ian & Maniloff, Peter, 2021. "Updating allowance allocations in cap-and-trade: Evidence from the NOx Budget Program," Journal of Environmental Economics and Management, Elsevier, vol. 105(C).
    6. Bizet, Romain & Bonev, Petyo & Leveque, Francois, 2020. "The effect of local monitoring on nuclear safety and compliance: Evidence from France," Economics Working Paper Series 2014, University of St. Gallen, School of Economics and Political Science.
    7. Hausman, Catherine, 2019. "Comment: Market deregulation and nuclear safety," Energy Economics, Elsevier, vol. 82(C), pages 68-69.
    8. Bernstein, David H. & Parmeter, Christopher F. & Tsionas, Mike G., 2023. "On the performance of the United States nuclear power sector: A Bayesian approach," Energy Economics, Elsevier, vol. 125(C).
    9. Chu, Yin & Chang, Chun-Ping, 2020. "Vertical separation of transmission control and market efficiency in the wholesale electricity market," The North American Journal of Economics and Finance, Elsevier, vol. 51(C).
    10. Zhen Lei & Chen-Hao Tsai & Andrew N. Kleit, 2017. "Deregulation and Investment in Generation Capacity: Evidence from Nuclear Power Uprates in the United States," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    11. Oliver, Matthew E., 2019. "Pricing flexibility under rate-of-return regulation: Effects on network infrastructure investment," Economic Modelling, Elsevier, vol. 78(C), pages 150-161.
    12. Karney, Daniel H., 2019. "Electricity market deregulation and environmental regulation: Evidence from U.S. nuclear power," Energy Economics, Elsevier, vol. 84(C).
    13. Gautam Gowrisankaran & Charles He & Eric A. Lutz & Jefferey L. Burgess, 2015. "Productivity, Safety, and Regulation in Underground Coal Mining: Evidence from Disasters and Fatalities," NBER Working Papers 21129, National Bureau of Economic Research, Inc.
    14. Jonathan Cohn & Tatyana Deryugina, 2018. "Firm-Level Financial Resources and Environmental Spills," NBER Working Papers 24516, National Bureau of Economic Research, Inc.
    15. Jonathan E. Hughes & Ian Lange, 2020. "Who (Else) Benefits From Electricity Deregulation? Coal Prices, Natural Gas, And Price Discrimination," Economic Inquiry, Western Economic Association International, vol. 58(3), pages 1053-1075, July.
    16. Romain Bizet & Petyo Bonev & François Lévêque, 2017. "Are older nuclear reactors less safe? Evidence from incident data in the French fleet," Working Papers hal-01695160, HAL.
    17. Lucija Muehlenbachs & Stefan Staubli & Mark A. Cohen, 2016. "The Impact of Team Inspections on Enforcement and Deterrence," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 3(1), pages 159-204.
    18. Lei, Zhen & Tsai, Chen-Hao, 2019. "Market deregulation and nuclear safety," Energy Economics, Elsevier, vol. 82(C), pages 62-67.
    19. Alexander Hill, 2023. "Price freezes and gas pass-through: an estimation of the price impact of electricity market restructuring," Journal of Regulatory Economics, Springer, vol. 63(1), pages 87-116, April.
    20. Bizet, Romain & Bonev, Petyo & Lévêque, François, 2022. "Are Older Nuclear Reactors Less Safe? Evidence from France," Economics Working Paper Series 2216, University of St. Gallen, School of Economics and Political Science.

    Replication

    This item has been replicated by:
  • Lei, Zhen & Tsai, Chen-Hao, 2019. "Market deregulation and nuclear safety," Energy Economics, Elsevier, vol. 82(C), pages 62-67.

    • More about this item

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • L98 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Government Policy
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

    Lists

    This item is featured on the following reading lists, Wikipedia, or ReplicationWiki pages:
    1. Corporate Incentives and Nuclear Safety (American Economic Journal: Economic Policy 2014) in ReplicationWiki

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