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Preparing for the Improbable: Safety Incentives and the Price-Anderson Act

Dubin, Jeffrey A. and Rothwell, Geoffrey S. (1987) Preparing for the Improbable: Safety Incentives and the Price-Anderson Act. Social Science Working Paper, 642. California Institute of Technology , Pasadena, CA. (Unpublished)

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The Price-Anderson Act requires commercial nuclear power plants to maintain (approximately) $660 million in off-site accident coverage through two forms of insurance: market-provided private insurance and self-insurance in the form of retrospective assessments of reactor owners. We examine how changes in retrospective assessments influence the safety incentives of nuclear reactor owners. As one would expect, increases in self-insurance premiums increase the incentive to install safety systems more quickly. However, a more important conclusion is that self-insurance premiums as a function of reactor riskiness, rather than equal payments by reactor owners, yield a higher level of safety than under the current law.

Item Type:Report or Paper (Discussion Paper)
Additional Information:While many people have assisted our research, some stand out for their special contributions: David Cain, Paul David, Peter Navarro, W. Edward Steinmueller, and particularly, Roger Noll. Remaining errors are our own. This research was funded by grants from the Exxon Educational Foundation to the Environmental Quality Laboratory at the California Institute of Technology and from the Center for Economic Policy Research at Stanford University.
Group:Social Science Working Papers
Funding AgencyGrant Number
Exxon Educational FoundationUNSPECIFIED
Series Name:Social Science Working Paper
Issue or Number:642
Record Number:CaltechAUTHORS:20170911-133209283
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Usage Policy:No commercial reproduction, distribution, display or performance rights in this work are provided.
ID Code:81297
Deposited By: Jacquelyn Bussone
Deposited On:11 Sep 2017 23:37
Last Modified:03 Oct 2019 18:41

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