A Comparison of the Effects of the Chernobyl and Three Mile Island Nuclear Accidents on the U.S. Electric Utility Industry

We examined the stock market reaction to two nuclear accidents, the Three Mile Island incident and the Chernobyl disaster. We were interested in determining whether the negative stock market reaction following these events was consistently related to the level of nuclear exposure by each firm and whether the negative reaction was reasonably linked to human safety concerns. Prior research has shown that following TMI, but anomalously not Chernobyl, firms with the more nuclear capacity experienced larger stock price declines. Moreover, the link of safety to stock market reaction has not been investigated for either accident. Firms with higher nuclear exposure and already in trouble with NRC lost more than others in stock market. Likewise, firms having nuclear reactors close to populated cities lost more in stock market.

Anahtar Kelimeler:

-

A Comparison of the Effects of the Chernobyl and Three Mile Island Nuclear Accidents on the U.S. Electric Utility Industry

Keywords:

-,

PDF

___

Barrett, W. B. A. J. Heuson and R. W. Kolb, (1986) ,“The Effect of Three Mile Island on Utility Bond Risk Premia: A Note”, The Journal of Finance, 41, 255-261.
Bowen, R. M. R. P. Castanias and L. A. Daley, (1983), “Intra-Industry Effects of the Accident at Three Mile Island”, Journal of Financial and Quantitative Analysis, 18, 87 –111.
Duffy, R. J., (1997) ,Nuclear Politics in America, Kansas: University Press of Kansas.
Green, W. H., (1997) ,Econometric Analysis, Third Edition, New Jersey: Prentice Hall.
Hill, J. and T. Schneeweis. ,(1983), “The Effect of Three Mile Island on Electric Utility Stock Prices: A Note”, The Journal of Finance, 38, 1285-1292.
Kalra, R. G. V. Henderson Jr., and G. A. Raines ,(1993), “Effects of the Chernobyl Nuclear Accident on the Utility Share Prices”, Quarterly Journal of Business and Economics, 32, 52-77.
Mededev, G. ,(1990), The Results about Chernobyl USA, HarperCollins Publishers.
MacKinlay, A. C. (1997), “Event Studies in Economics and Finance”, Journal of Economic Literature, 35, 13-39.
Malatesta, P. H. ,(1986), “Measuring Abnormal Performance: The Event Parameter Approach Using Joint Generalized Least Squares”, Journal of Financial and Quantitative Analysis, 21 27-38.
Nealey, S. M. ,(1990), Nuclear Power Development: Prospects in the 1990s, Columbus, Ohio: Battle Press.
Pruitt, S. W. W. Tawarangkoon, and K. C. J. Wei. ,(1987), “Chernobyl, Commodities, and Chaos: An Examination of the Reaction of Commodity Futures Prices to Evolving Information”, The Journal of Future Markets, 7, 555-569.
Value Line Company., (May and June1986), Value Line Investment Survey. New York USA.
__________________.,(January-March, 1979), Value Line Investment Survey. New York USA.
Wilson, R., (1992) ,“The Future of Nuclear Power”, Environmental Science Technology, 26, 1116-11120.