A note on the stock market's reaction to the accident at three mile island

Abstract

This note provides new information regarding the market reaction toward electric utility stocks that resulted both from the accident at Three Mile Island, and the events predating and postdating the accident. The results suggest that some of the market reaction heretofore ascribed to the accident resulted instead from regulatory activity occurring before the accident. We also provide results suggesting that regulatory activity by the Pennsylvania Public Utilities Commission in the wake of the accident served to offset a majority of the increased systematic risk resulting from the accident. Our results imply that previously reported lingering effects of the accident at Three Mile Island may be regulatory effects from events predating the accident.