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NUCLEAR POWER, SYSTEMATIC RISK, AND THE COST OF CAPITAL
Author(s) -
FARBER STEPHEN
Publication year - 1991
Publication title -
contemporary economic policy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.454
H-Index - 49
eISSN - 1465-7287
pISSN - 1074-3529
DOI - 10.1111/j.1465-7287.1991.tb00319.x
Subject(s) - nuclear power , mile , economics , equity (law) , panel data , actuarial science , business , econometrics , geography , ecology , geodesy , political science , law , biology
Previous studies of the effects of adoption of nuclear technologies by electric utilities have concentrated on the period following the catastrophe at Three Mile Island (TMI) in 1979. The purpose of this study is to test whether increased risk effects on equity costs of nuclear‐adopting utilities existed prior to that event. This study, using panel data and beta measures of systematic risk, concludes that a positive, significant, and persistent nuclear adoption effect existed even prior to TMI. Nuclear adoption increased equity costs, on average, 0.8 percent for periods following the adoption event. This is of the same order of magnitude as adoption effects estimated in other studies for the post‐TMI period.