Date of Award

Winter 1991

Project Type

Dissertation

Program or Major

Economics

Degree Name

Doctor of Philosophy

First Advisor

Richard W England

Abstract

This dissertation is a study of the U.S. commercial nuclear power industry from 1974-1984 covering the operations of 87 power plants. It seeks to help explain the actions of a regulated firm faced with environmental constraints from the Nuclear Regulatory Commission and financial constraints from State regulatory bodies. Theoretical and applied conceptions of the regulated monopoly are reviewed in a historical and integrated format using both the neoclassical and institutional positions. For the neoclassical approach, I've attempted to find empirical support for the Averch-Johnson hypothesis by including profit maximizing and environmental constraints in my econometric model. For the institutionalist approach, I have tried to look into the institutional reasons for the behavior exhibited by the firms. The seminal hypothesis for this project was that because of the unique plant-specific characteristics of the U.S. nuclear industry that emissions were a function of specific plant characteristics, operational data, financial results and regulatory requirements.

A data base which consists of financial, radioactive emissions, and technical operations information has been compiled in order to allow testing of various hypotheses drawn from theoretical and applied sources. For this longitudinal data base, a semi-log, fixed-effect model with a lagged dependent variable was estimated. The estimation requires the use of a two-stage least squares procedure which results in consistent estimates.

The results of my analysis support five very clear conclusions. First, nuclear power plant emissions have dramatically trended downward since 1978/1979 across most of the elements examined. Second, there is little indication that variability in emissions is affected by variability in the firm's financial results. Third, the statistics reveal the very clear individual nature of the nuclear power plants in the U.S. Fourth, in spite of these dramatic declines in emissions releases, evidence was presented that the environmental inventories of some isotopes have been increasing. Fifth, for this one example of environmental behavior by one group of regulated monopoly firms, the increased vigilance by the regulatory officials within the Nuclear Regulatory Commission and the Environmental Protection Agency has indeed had its intended effects.

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