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Using Happiness Surveys to Value Intangibles: The Case of Airport Noise Author info | Abstract | Publisher info | Download info | Related research | Statistics van Praag, Bernard M. S. () (University of Amsterdam, Tinbergen Institute and IZA Bonn)
Baarsma, Barbara E. (SEO, University of Amsterdam)
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Inhabitants 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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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number
1096.
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Length: 32 pages
Date of creation: Mar 2004Date of revision:
Handle: RePEc:iza:izadps:dp1096Contact details of provider: Postal: IZA, P.O. Box 7240, D-53072 Bonn, Germany Phone: +49 228 3894 223 Fax: +49 228 3894 180 Web page: http://www.iza.org
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Keywords: cost-benefit analysis externalities airport noise satisfaction analysis residual shadow costs Other versions of this item:
Find related papers by JEL classification: 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
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