Spatial Effects in Willingness-to-Pay: The Case of Two Nuclear Risks
AbstractThis paper examines the spatial dimension of marginal willingness to pay (MWP) for reduction of nuclear risks through increased insurance coverage. The effect of distance from a nuclear power plant on individuals’ MWP is ambiguous. MWP is expected to decrease with distance because the risk of being affected by an accident decreases. However, if individuals choose their residential location taking the operational risk into account, MWP is predicted to first increase and later decrease with distance from the nuclear power plant. On the other hand, there are risks associated with transportation and disposal of nuclear waste where distance should matter only in the vicinity of the plant. These theoretical predictions are tested with data collected using a stated choice experiment. The predictions are largely confirmed by the evidence.
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Bibliographic InfoPaper provided by Socioeconomic Institute - University of Zurich in its series SOI - Working Papers with number 0502.
Length: 31 pages
Date of creation: Jan 2005
Date of revision: Sep 2007
stated choice experiment; liability insurance; nuclear accident; willingness to pay;
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- K13 - Law and Economics - - Basic Areas of Law - - - Tort Law and Product Liability; Forensic Economics
- L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-02-12 (All new papers)
- NEP-DCM-2006-02-12 (Discrete Choice Models)
- NEP-ENE-2006-02-12 (Energy Economics)
- NEP-GEO-2006-02-12 (Economic Geography)
- NEP-URE-2006-02-12 (Urban & Real Estate Economics)
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