Financial and environmental behavior of the regulated firm: A case study of the US nuclear power industry, 1974-1984

This study of the US commercial nuclear power industry from 1974-1984 covers 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, the author seeks empirical support for the Averch-Johnson hypothesis by including profit-maximizing and environmental constraints in his econometric model. For the institutionalist approach, he tries to look into the institutional reasons for the behavior exhibited by the firms. A date 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. The results of the analysis support five very clear conclusions which are presented