Spatial Effects in Willingness-to-Pay: The Case of Two Nuclear Risks

Yves Schneider () and Peter Zweifel ()
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Peter Zweifel: Socioeconomic Institute, University of Zurich

No 502, SOI - Working Papers from Socioeconomic Institute - University of Zurich

Abstract: This paper examines the spatial dimension of marginal willingness to pay (MWP) for reduction of nuclear risks through increased insurance coverage. The effect of distance from a nuclear power plant on individuals� MWP is ambiguous. MWP is expected to decrease with distance because the risk of being affected by an accident decreases. However, if individuals choose their residential location taking the operational risk into account, MWP is predicted to first increase and later decrease with distance from the nuclear power plant. On the other hand, there are risks associated with transportation and disposal of nuclear waste where distance should matter only in the vicinity of the plant. These theoretical predictions are tested with data collected using a stated choice experiment. The predictions are largely confirmed by the evidence.

Keywords: stated choice experiment; liability insurance; nuclear accident; willingness to pay (search for similar items in EconPapers)
JEL-codes: C25 K13 L94 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2005-01, Revised 2007-09
New Economics Papers: this item is included in nep-dcm, nep-ene, nep-geo and nep-ure
References: Add references at CitEc
Citations: View citations in EconPapers (25)

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https://www.zora.uzh.ch/id/eprint/52358/1/wp0502.pdf Revised version, 2007 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:soz:wpaper:0502

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