TECHNOLOGICAL DISASTERS AND NATURAL-RESOURCES DAMAGE ASSESSMENT - AN EVALUATION OF THE EXXON-VALDEZ OIL-SPILL

Ex post analysis can enhance assessment of the social costs of technological disasters. This paper employs a market model to evaluate the economic losses of the 1989 Exxon Valdez oil spill on southcentral Alaska's fisheries. The upper bound of the accident's first-year social costs on these resources is $108 million, approximately 27 percent of ex-vessel value. Second-year effects may have been as high as $47 million. More probable estimates of the oil spill's actual social costs are likely less than these amounts. Precise determination of the accident's impacts is constrained by the dynamic interaction of numerous biological and economic variables.