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Monetary valuation of aircraft noise: A hedonic analysis around Amsterdam airport

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Author Info

  • Dekkers, Jasper E.C.
  • van der Straaten, J. Willemijn

Abstract

In densely-populated countries and in particular in large metropolitan areas, the presence of so much human activity causes all sorts of negative externalities, for example traffic noise disturbance. These externalities call for corrective measures by the government. Economists have developed a number of procedures that provide reasonable estimates on the monetary value of some amenities and externalities. In this paper we develop a spatially-explicit hedonic pricing model for house prices in order to quantify the social cost of aircraft noise disturbance in monetary terms. While focusing on aircraft noise around Amsterdam airport in the urban fringe of the Amsterdam region, a key point in our analysis is that we account for background noise. We do this by taking multiple sources of traffic noise (i.e. road, railway and aircraft noise) into account simultaneously and by setting threshold values for all three sources of noise above which sound is generally experienced as nuisance. Based on our regression results we conclude that a higher noise level means ceteris paribus a lower house price. Air traffic has the largest price impact, followed by railway traffic and road traffic. These model outcomes can subsequently be used to estimate the marginal and total benefits of aircraft noise reduction in the studied area around Amsterdam airport. We find a marginal benefit of 1Â dB noise reduction of 1459 Euro per house, leading to a total benefit of 1Â dB noise reduction of 574Â million Euros.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 68 (2009)
Issue (Month): 11 (September)
Pages: 2850-2858

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Handle: RePEc:eee:ecolec:v:68:y:2009:i:11:p:2850-2858

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Web page: http://www.elsevier.com/locate/ecolecon

Related research

Keywords: Aircraft noise GIS Hedonic price theory Noise reduction Valuation;

References

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  1. Brett Day & Ian Bateman & Iain Lake, 2007. "Beyond implicit prices: recovering theoretically consistent and transferable values for noise avoidance from a hedonic property price model," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 37(1), pages 211-232, May.
  2. Bera, Anil K. & Yoon, Mann J., 1993. "Specification Testing with Locally Misspecified Alternatives," Econometric Theory, Cambridge University Press, vol. 9(04), pages 649-658, August.
  3. Morrison, Steven A & Winston, Clifford & Watson, Tara, 1999. "Fundamental Flaws of Social Regulation: The Case of Airplane Noise," Journal of Law and Economics, University of Chicago Press, vol. 42(2), pages 723-43, October.
  4. van Praag, Bernard M. S. & Baarsma, Barbara E., 2004. "Using Happiness Surveys to Value Intangibles: The Case of Airport Noise," IZA Discussion Papers 1096, Institute for the Study of Labor (IZA).
  5. Anselin, Luc & Bera, Anil K. & Florax, Raymond & Yoon, Mann J., 1996. "Simple diagnostic tests for spatial dependence," Regional Science and Urban Economics, Elsevier, vol. 26(1), pages 77-104, February.
  6. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
  7. Palmquist, Raymond B., 2006. "Property Value Models," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 2, chapter 16, pages 763-819 Elsevier.
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Citations

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Cited by:
  1. repec:dgr:uvatin:0000035 is not listed on IDEAS
  2. Andersson, Henrik & Jonsson, Lina & Ögren, Mikael & Swärdh, Jan-Erik, 2012. "Estimating non-marginal willingness to pay for railway noise abatement: Application of the two-step hedonic regression technique," TSE Working Papers 12-360, Toulouse School of Economics (TSE).
  3. Sunak, Yasin & Madlener, Reinhard, 2012. "The Impact of Wind Farms on Property Values: A Geographically Weighted Hedonic Pricing Model," FCN Working Papers 3/2012, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN), revised Mar 2013.
  4. Yoo, James & Perrings, Charles & Kinzig, Ann & Abbott, Joshua K. & Simonit, Silvio & Connors, John P. & Maliszewski, Paul J., 2012. "The Value of Water Rights in Agricultural Properties in the Phoenix Active Management Area," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124095, Agricultural and Applied Economics Association.
  5. Montero, José-María & Fernández-Avilés , Gema & Mínguez, Román, 2011. "Spatial Hedonic Pricing Models for Testing the Adequacy of Acoustic Areas in Madrid, Spain," Investigaciones Regionales, Asociación Española de Ciencia Regional, issue 21, pages 157-181.
  6. Friso de Vor & Henri L.F. de Groot, 0000. "The Impact of Industrial Sites on Residential Property Values," Tinbergen Institute Discussion Papers 09-035/3, Tinbergen Institute.
  7. Yoo, James & Simonit, Silvio & Connors, John P. & Maliszewski, Paul J. & Kinzig, Ann P. & Perrings, Charles, 2013. "The value of agricultural water rights in agricultural properties in the path of development," Ecological Economics, Elsevier, vol. 91(C), pages 57-68.

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