Does It Matter If You Live Next to a Nuclear Power Plant? based on articles in Land Economics , March 1991 and Journal of Regional Science November 2000. This session discusses environmental
Does It Matter If You Live Next
to a Nuclear Power Plant?
based on articles
Land Economics, March 1991
Journal of Regional Science
This session discusses environmental
costs of several types:
1. Cases of a threat without physical damage.
2. Cases of physical or emotional damage.
3. Cases of perceptions of harm to the
The nuclear power case is generally one
of threat without physical damage.
Its study is the source of what I have
learned about environmental costs of
My knowledge is economic knowledge;
I mean by this that it is limited both
to the sphere of economics and to my
Please be thinking about these questions
in addition to your own:
1. What harm can nuclear power do
and to whom?
2. Does the perception or prediction of
harm count as an environmental cost?
3. Do Americans really perceive any harm
or care about it?
Where our reactors are located, ca 1998:
The percent share
of each country’s
energy needs that
are supplied by
plants, ca 1998.
Three Mile Island, Middletown, PA
The economic theory of environmental
1. Some environmental costs are
normally incurred in economic
production--these need not be
inefficient uses of the environment:
E.g.: a. the woodcutter; b. the lumber mill,
c. the farmer clearing land; d. fishermen;
e. city builder and so on.
For economic theory, the key question is
whether the environmental costs are fully
incorporated into the costs of the product.
The idea: In such case, humanity is
recognizing its effects on the environment,
and provided also that markets are well-
functioning competitive markets--then
the environment is being properly employed.
The poet might put it this way:
We, too, are children of the universe,
we have a right to use the Earth's
resources just as do the other
So what is the problem? Is there one?
2. In economic theory, the environment
is misused when the damage is not
fully recognized and incorporated into
the economic costs we humans incur.
These problems are called
Formally: An detrimental externality is a
harm caused by a market activity that
is non-monetary and is not compensated.
E.g: factory smoke--detrimental externality
acid rain--detrimental externality
labor costs--not an externality
materials costs--not an externality
compensated pollution--not an externality
An externality in theory:
the market as
a circle around
side effect can
be any harm
An externality in reality? An archive photo.
Externalities will tend to self-correct
when property rights are clearly defined
and transactions costs are minimal.
If these concepts define the environmental
costs of e.g. nuclear power, then
what are the costs in this case?
Is this kind of thing really possible?
No! The scientists complain.
The Manhattan Project would
have been a piece of cake if
it were this easy.
An atom bomb requires large
yield conventional explosives
just to get things going—”implosion”.
1. A severe accident would spew
radioactive matter into the environment
damaging both humans and physical assets.
2. The nuclear waste material lasts a very
long time, is difficult to store safely, and
is nearly impossible to store politically.
A related question of interest to me:
1. Is an imagined threat properly
a detrimental externality?
2. Is a threat without battery considered
an assault under the law?
What do we know about Three Mile Island
the best known nuclear crisis in America?
Mainly that the distance “gradient” on house
prices was neutral around Three Mile Island
both before and after the accident.
Positive gradient (hypothetical)
What researchers found:
Neutral gradient (actual).
One other study confirmed this with 4 other plants:
Plus Three Mile Island again.
Didn't anyone care?
Do people even notice?
My background to this story.
1. Donna and I lived near TMI from August 1981
until August 1986.
2. Colleagues at Penn State Harrisburg did
research on the human reactions to the
Middletown days: Self & relatives at TMI.
The campus was also in Middletown and near TMI.
Hough taught at
in MIS and Econ
from early 1960s
Robbin had assembled
data suitable to make
and initial study.
He "amassed" data.
Our study found: Farmland with
a nuclear “neighbor” is worth about
10 (ten) percent less than elsewhere.
(We compared some 80 nuclear areas to some
410 nonnuclear areas over 11 years.)
Year of the data
in land value
A drop in
in each of
Nuclear plants will drop your farmland value
by 3 to 4 percent on average.
and over 10 percent for many farm locations.
Imagine Farmer Kushinsky owns
section of farmland valued at
$5,000 per acre. A 10 percent
drop in per acre value means he