Using Happiness Surveys to Value Intangibles: The Case of Airport Noise
AbstractInhabitants of houses near Amsterdam Airport are complaining of noise nuisance, caused by aircraft traffic. The usual assumption is that the effect of the externality will be perfectly reflected by house price differentials. This is based on the implicit assumption that there is a well-functioning housing market. If that is not true, we need a correction method in order to assess the intangible damage. We assess the monetary value of the noise damage, caused by aircraft noise nuisance around Amsterdam Airport as the sum of hedonic price differentials and a residual cost component. The residual costs are assessed from a survey, including an ordinal life satisfaction scale, on which individual respondents have scored. The derived compensation scheme depends on, among other things, the objective noise level, income, the degree to which prices account for noise differences, and the presence of noise insulation.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 1163.
Date of creation: 2004
Date of revision:
cost-benefit analysis; externalities; airport noise; satisfaction analysis; residual shadow costs;
Other versions of this item:
- Bernard M. S. van Praag & Barbara E. Baarsma, 2005. "Using Happiness Surveys to Value Intangibles: The Case of Airport Noise," Economic Journal, Royal Economic Society, vol. 115(500), pages 224-246, 01.
- 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).
- Bernard M.S. van Praag & B.E. Baarsma, 2004. "Using Happiness Surveys to value Intangibles; the Case of Airport Noise," Tinbergen Institute Discussion Papers 04-024/3, Tinbergen Institute.
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
- C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
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