The role of compensation in siting hazardous facilities

Howard Kunreuther and Doug Easterling
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Howard Kunreuther: The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania, Postal: The Wharton School, University of Pennsylvania, Philadelphia, Pennsylvania
Doug Easterling: University of Colorado, Boulder, Colorado, Postal: University of Colorado, Boulder, Colorado

Journal of Policy Analysis and Management, 1996, vol. 15, issue 4, 601-622

Abstract: Empirical evidence indicates that compensation can prove effective in gaining public acceptance for siting facilities on the benign end of the spectrum (e.g., landfills, prisons), but is subject to serious limitations when it comes to facilities that the public regards as particularly risky or of questionable legitimacy such as nuclear waste repositories. These facilities require creative mitigation measures such as independent inspections of the facility and local shutdown power. Even then they may be viewed as too risky to be acceptable with or without compensation. This article proposes a two-stage siting process which recognizes the importance of regulations and safety standards (Stage 1) while employing a voluntary process with compensation to address concerns with equity and efficiency (Stage 2).

Date: 1996
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Persistent link: https://EconPapers.repec.org/RePEc:wly:jpamgt:v:15:y:1996:i:4:p:601-622

DOI: 10.1002/(SICI)1520-6688(199623)15:4<601::AID-PAM6>3.0.CO;2-L

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