Nothing Special   »   [go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/p/fer/wpaper/57.html
   My bibliography  Save this paper

Dimming Hopes for Nuclear Power: Quantifying the Social Costs of Perceptions of Risks

Author

Listed:
  • Huhtala, Anni
  • Remes, Piia
Abstract
The preferences expressed in voting on nuclear reactor licenses and the risk perceptions of citizens provide insights into social costs of nuclear power and decision making in energy policy. We show analytically that these costs consist of disutility caused by unnecessary anxiety - due to misperceived risks relating to existing reactors - and where licenses for new nuclear reactors are not granted, delayed or totally lost energy production. Empirical evidence is derived from Finnish surveys utilizing alternative risk rating scales and framing in elicitation of risk perceptions associated with nuclear power across contexts. We find a considerable negative impact of a high perceived risk of nuclear accident on the probability to support nuclear power. This result holds across a number of robustness checks including an instrumental variable estimation and a model validation by observed voting behavior of the members of Parliament. The public's risk perceptions translate into a significant social cost, and are likely to affect the revenues, costs and financing conditions in the nuclear power sector in the future. 7.11.2014 released WP was reissued 7.7.2016.

Suggested Citation

  • Huhtala, Anni & Remes, Piia, 2016. "Dimming Hopes for Nuclear Power: Quantifying the Social Costs of Perceptions of Risks," Working Papers 57, VATT Institute for Economic Research.
    • Handle: RePEc:fer:wpaper:57
    as

    Download full text from publisher

    File URL: https://www.doria.fi/handle/10024/148796
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Heyes, Anthony & Heyes, Catherine, 2000. "An empirical analysis of the Nuclear Liability Act (1970) in Canada," Resource and Energy Economics, Elsevier, vol. 22(1), pages 91-101, January.
    2. Jan-Erik Lönnqvist & Markku Verkasalo & Gari Walkowitz & Philipp C. Wichardt, 2011. "Measuring Individual Risk Attitudes in the Lab: Task or Ask?: An Empirical Comparison," SOEPpapers on Multidisciplinary Panel Data Research 370, DIW Berlin, The German Socio-Economic Panel (SOEP).
    3. Douglas Almond & Lena Edlund & Mårten Palme, 2009. "Chernobyl's Subclinical Legacy: Prenatal Exposure to Radioactive Fallout and School Outcomes in Sweden," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(4), pages 1729-1772.
    4. Glenn W. Harrison & Morten I. Lau & E. Elisabet Rutström, 2007. "Estimating Risk Attitudes in Denmark: A Field Experiment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(2), pages 341-368, June.
    5. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde & Jürgen Schupp & Gert G. Wagner, 2011. "Individual Risk Attitudes: Measurement, Determinants, And Behavioral Consequences," Journal of the European Economic Association, European Economic Association, vol. 9(3), pages 522-550, June.
    6. Danzer, Alexander M. & Danzer, Natalia, 2016. "The long-run consequences of Chernobyl: Evidence on subjective well-being, mental health and welfare," Journal of Public Economics, Elsevier, vol. 135(C), pages 47-60.
    7. François Salanié & Nicolas Treich, 2009. "Regulation in Happyville," Economic Journal, Royal Economic Society, vol. 119(537), pages 665-679, April.
    8. Paul Slovic & Melissa L. Finucane & Ellen Peters & Donald G. MacGregor, 2004. "Risk as Analysis and Risk as Feelings: Some Thoughts about Affect, Reason, Risk, and Rationality," Risk Analysis, John Wiley & Sons, vol. 24(2), pages 311-322, April.
    9. Thomas Dohmen & Armin Falk & David Huffman & Uwe Sunde, 2012. "The Intergenerational Transmission of Risk and Trust Attitudes," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 645-677.
    10. Laes, Erik & Meskens, Gaston & van der Sluijs, Jeroen P., 2011. "On the contribution of external cost calculations to energy system governance: The case of a potential large-scale nuclear accident," Energy Policy, Elsevier, vol. 39(9), pages 5664-5673, September.
    11. Felder, Frank A., 2009. "A critical assessment of energy accident studies," Energy Policy, Elsevier, vol. 37(12), pages 5744-5751, December.
    12. Bauer, Thomas K. & Braun, Sebastian & Kvasnicka, Michael, 2013. "Distant Event, Local Effects? Fukushima and the German Housing Market," Ruhr Economic Papers 433, RWI - Leibniz-Institut für Wirtschaftsforschung, Ruhr-University Bochum, TU Dortmund University, University of Duisburg-Essen.
    13. Rachel Croson & Uri Gneezy, 2009. "Gender Differences in Preferences," Journal of Economic Literature, American Economic Association, vol. 47(2), pages 448-474, June.
    14. Daniel J. Benjamin & Ori Heffetz & Miles S. Kimball & Nichole Szembrot, 2014. "Beyond Happiness and Satisfaction: Toward Well-Being Indices Based on Stated Preference," American Economic Review, American Economic Association, vol. 104(9), pages 2698-2735, September.
    15. Lucas W. Davis, 2012. "Prospects for Nuclear Power," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 49-66, Winter.
    16. repec:cup:judgdm:v:1:y:2006:i::p:48-63 is not listed on IDEAS
    17. Kessides, Ioannis N., 2012. "The future of the nuclear industry reconsidered: Risks, uncertainties, and continued promise," Energy Policy, Elsevier, vol. 48(C), pages 185-208.
    18. Jon P. Nelson, 2002. ""Green" Voting And Ideology: Lcv Scores And Roll-Call Voting In The U.S. Senate, 1988-1998," The Review of Economics and Statistics, MIT Press, vol. 84(3), pages 518-529, August.
    19. Charles F. Manski, 2004. "Measuring Expectations," Econometrica, Econometric Society, vol. 72(5), pages 1329-1376, September.
    20. Linares, Pedro & Conchado, Adela, 2013. "The economics of new nuclear power plants in liberalized electricity markets," Energy Economics, Elsevier, vol. 40(S1), pages 119-125.
    21. Nigel Nicholson & Emma Soane & Mark Fenton-O'Creevy & Paul Willman, 2005. "Personality and domain-specific risk taking," Journal of Risk Research, Taylor & Francis Journals, vol. 8(2), pages 157-176, March.
    22. Riddel, Mary, 2011. "Uncertainty and measurement error in welfare models for risk changes," Journal of Environmental Economics and Management, Elsevier, vol. 61(3), pages 341-354, May.
    23. Kessides, Ioannis N., 2010. "Nuclear power: Understanding the economic risks and uncertainties," Energy Policy, Elsevier, vol. 38(8), pages 3849-3864, August.
    24. Jan Goebel & Christian Krekel & Tim Tiefenbach & Nicholas R. Ziebarth, 2014. "Natural Disaster, Environmental Concerns, Well-Being and Policy Action," CINCH Working Paper Series 1405, Universitaet Duisburg-Essen, Competent in Competition and Health.
    25. Hunt Allcott, 2013. "The Welfare Effects of Misperceived Product Costs: Data and Calibrations from the Automobile Market," American Economic Journal: Economic Policy, American Economic Association, vol. 5(3), pages 30-66, August.
    26. Sovacool, Benjamin K., 2008. "The costs of failure: A preliminary assessment of major energy accidents, 1907-2007," Energy Policy, Elsevier, vol. 36(5), pages 1802-1820, May.
    27. Kessides, Ioannis N., 2012. "The future of the Nuclear industry reconsidered : risks, uncertainties, and continued potential," Policy Research Working Paper Series 6112, The World Bank.
    28. Nicholas C. Barberis, 2013. "Thirty Years of Prospect Theory in Economics: A Review and Assessment," Journal of Economic Perspectives, American Economic Association, vol. 27(1), pages 173-196, Winter.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Huhtala, Anni & Remes, Piia, 2017. "Quantifying the social costs of nuclear energy: Perceived risk of accident at nuclear power plants," Energy Policy, Elsevier, vol. 105(C), pages 320-331.
    2. Mohammad H. Sepahvand & Roujman Shahbazian, 2021. "Sibling correlation in risk attitudes: evidence from Burkina Faso," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(1), pages 45-72, March.
    3. Jonathan P. Beauchamp & David Cesarini & Magnus Johannesson, 2017. "The psychometric and empirical properties of measures of risk preferences," Journal of Risk and Uncertainty, Springer, vol. 54(3), pages 203-237, June.
    4. Linares, Pedro & Conchado, Adela, 2013. "The economics of new nuclear power plants in liberalized electricity markets," Energy Economics, Elsevier, vol. 40(S1), pages 119-125.
    5. Lönnqvist, Jan-Erik & Verkasalo, Markku & Walkowitz, Gari & Wichardt, Philipp C., 2015. "Measuring individual risk attitudes in the lab: Task or ask? An empirical comparison," Journal of Economic Behavior & Organization, Elsevier, vol. 119(C), pages 254-266.
    6. Sepahvand, Mohammad H & Shahbazian, Roujman & Bali Swain, Ranjula, 2018. "Does revolution change risk attitudes? Evidence from Burkina Faso," Working Paper Series 2019:2, Uppsala University, Department of Economics.
    7. Menkhoff, Lukas & Sakha, Sahra, 2017. "Estimating risky behavior with multiple-item risk measures," Journal of Economic Psychology, Elsevier, vol. 59(C), pages 59-86.
    8. van Huizen, Thomas & Alessie, Rob, 2019. "Risk aversion and job mobility," Journal of Economic Behavior & Organization, Elsevier, vol. 164(C), pages 91-106.
    9. Lasha Lanchava & Kyle Carlson & Blanka Šebánková & Jaroslav Flegr & Gideon Nave, 2015. "No Evidence of Association between Toxoplasma gondii Infection and Financial Risk Taking in Females," PLOS ONE, Public Library of Science, vol. 10(9), pages 1-17, September.
    10. Sepahvand, Mohammad H, 2019. "Agricultural productivity in Burkina Faso: The role of gender andrisk attitudes," Working Paper Series 2019:3, Uppsala University, Department of Economics.
    11. Bucciol, Alessandro & Zarri, Luca, 2017. "Do personality traits influence investors’ portfolios?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 68(C), pages 1-12.
    12. Nieboer, Jeroen, 2015. "Group member characteristics and risk taking by consensus," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 57(C), pages 81-88.
    13. Mohammad Sepahvand, 2022. "Agricultural Productivity in Burkina Faso: The Role of Gender and Risk Attitudes," Working Papers ECARES 2022-32, ULB -- Universite Libre de Bruxelles.
    14. Fossen, Frank M. & Glocker, Daniela, 2017. "Stated and revealed heterogeneous risk preferences in educational choice," European Economic Review, Elsevier, vol. 97(C), pages 1-25.
    15. Michael Daly & Liam Delaney & Séamus McManus, 2010. "Risk Attitudes as an Independent Predictor of Debt," Working Papers 201049, Geary Institute, University College Dublin.
    16. Jan-Erik Loennqvist & Markku Verkasalo & Gari Walkowitz & Philipp C. Wichardt, 2011. "Measuring Individual Risk Attitudes in the Lab: Task or Ask? An Empirical Comparison," Cologne Graduate School Working Paper Series 02-03, Cologne Graduate School in Management, Economics and Social Sciences.
    17. Lohse, Johannes, 2016. "Smart or selfish – When smart guys finish nice," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 64(C), pages 28-40.
    18. Nadia Simoes & Nuno Crespo & Sandrina B. Moreira, 2016. "Individual Determinants Of Self-Employment Entry: What Do We Really Know?," Journal of Economic Surveys, Wiley Blackwell, vol. 30(4), pages 783-806, September.
    19. Jetter, Michael & Magnusson, Leandro M. & Roth, Sebastian, 2020. "Becoming sensitive: Males’ risk and time preferences after the 2008 financial crisis," European Economic Review, Elsevier, vol. 128(C).
    20. Burgherr, Peter & Hirschberg, Stefan, 2014. "Comparative risk assessment of severe accidents in the energy sector," Energy Policy, Elsevier, vol. 74(S1), pages 45-56.

    More about this item

    Keywords

    energy; vote; nuclear accident; subjective risks; probabilities; binary variable; instrumental variable; Environment; energy and climate policy; Ympäristö; energia ja ilmastopolitiikka;
    All these keywords.

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fer:wpaper:57. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Anita Niskanen (email available below). General contact details of provider: https://edirc.repec.org/data/vatttfi.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.