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Charging the polluters: A pricing model for road and railway noise

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Abstract

This study outlines a method to estimate the short run marginal cost (SRMC) for road and railway noise. It is based on standardized calculation methods for total noise levels and monetary cost estimates from well established evaluation methods. Here official calculation methods and monetary values are used for Sweden, but the estimation method for the SRMC outlined can be directly applied using other standardized noise calculation methods and monetary values. This implies that the current knowledge regarding the calculation of total noise levels and the evaluation of the social cost of noise can be extended to estimate the marginal effect as well. This is an important finding since it enables policy makers to price noise externalities in an appropriate way. Several sensitivity tests run for the SRMC show that: (i) increasing the total traffic on the infrastructure has only a minor influence, (ii) estimates are quite sensitive to the number of exposed individuals, and (iii) to the monetary values used. Hence, benefits transfer, i.e. using monetary values elicited based on road noise for railway noise, should be done with caution or not at all. Results also show that the use of quiet technology can have a significant effect on the SRMC. The fact that this model is able to differentiate not only modes of transport, but also vehicles and even technologies is an important finding. It is essential that the noise charges give the operators the right incentives to choose their optimal allocation.

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Bibliographic Info

Paper provided by Swedish National Road & Transport Research Institute (VTI) in its series Working Papers with number 2010:15.

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Length: 30 pages
Date of creation: 21 Dec 2010
Date of revision:
Handle: RePEc:hhs:vtiwps:2010_015

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Postal: VTI, Transport Economics, P.O. Box 6056, SE-171 06 Solna, Sweden
Phone: +46-13-20 40 00
Fax: +46-13-14 14 36
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Web page: http://www.vti.se/tek
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Keywords: Externalities; Marginal cost; Noise; Railway; Road;

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  1. Andersson, Henrik & Ögren, Mikael, 2006. "Noise Charges in Railway Infrastructure: A Pricing Schedule Based on the Marginal Cost Principle," Working Papers 2006:4, Swedish National Road & Transport Research Institute (VTI).
  2. Henrik Andersson & Lina Jonsson & Mikael Ögren, 2010. "Property Prices and Exposure to Multiple Noise Sources: Hedonic Regression with Road and Railway Noise," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 45(1), pages 73-89, January.
  3. Andersson, Henrik & Jonsson, Lina & Ögren, Mikael, 2010. "Benefit measures for noise abatement: Calculations for road and rail traffic noise," LERNA Working Papers 10.17.323, LERNA, University of Toulouse.
  4. 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.
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