Valuing nuclear energy risk: Evidence from the impact of the Fukushima crisis on US house prices

Behavioral economics suggests that individuals overweight recent unexpected and/or rare events when updating beliefs. This study investigates the effect of such an event, the Fukushima nuclear crisis in 2011, on the learning process of a local environmental risk by evaluating how perceptions of the risk of a nuclear accident are capitalized into house prices near nuclear power plants (NPPs) in the U.S. Our results provide new evidence on the dynamics of the effect - spatially, the impact was concentrated in a 4-km radius around NPPs, and temporally, it peaked a half year later and dissipated one year after the crisis. (C) 2018 Elsevier Inc. All rights reserved.