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Determining Off-Site Damages to Non-Residential Property from Leaking Underground Storage Tanks Using Contingent Valuation Analysis

Author

Listed:
  • Robert A. Simons

    () (Cleveland State University)

  • Jesse Saginor

    () (Texas A&M University)

Abstract

This research evaluates the effect of leaking underground storage tanks (LUSTs) from gas stations on nearby commercial property when the existing data is incomplete or imperfect. While methodologies such as hedonic regression may be preferred for evaluating the effects of LUSTs on property values, the rigorous data requirements of these methodologies often cannot be met. Contingent valuation analysis is one method that enables estimation of losses when the data available is incomplete. A contingent valuation analysis of real estate professionals in South Carolina and Ohio provides estimates of commercial property losses, which ranges from 0-40%, depending on environmental conditions and proximity to the source. This research has developed a methodology for estimating real estate property value losses when data requirements cannot be fulfilled based on the best available data.

Suggested Citation

  • Robert A. Simons & Jesse Saginor, 2010. "Determining Off-Site Damages to Non-Residential Property from Leaking Underground Storage Tanks Using Contingent Valuation Analysis," International Real Estate Review, Asian Real Estate Society, vol. 13(2), pages 134-156.
  • Handle: RePEc:ire:issued:v:13:n:02:2010:p:134-156
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    File URL: http://www.umac.mo/fba/irer/papers/past/vol13n2_pdf/2-090310%20Commercial%20CV%20SC%20_Simons%20Saginor_.pdf
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    References listed on IDEAS

    as
    1. Hank Jenkins-Smith & Carol Silva & Robert Berrens & Alok Bohara, 2002. "Information Disclosure Requirements and the Effect of Soil Contamination on Property Values," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 45(3), pages 323-339.
    2. Thomas O. Jackson, 2001. "Environmental Risk Perceptions of Commercial and Industrial Real Estate Lenders," Journal of Real Estate Research, American Real Estate Society, vol. 22(3), pages 271-288.
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    Citations

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    Cited by:

    1. Robert A. Simons & Ron Throupe, 2012. "Debundling Property Rights for Contaminated Properties: Valuing the Opportunity Cost of the Right to Sell, Using Cumulative Options," International Real Estate Review, Asian Real Estate Society, vol. 15(2), pages 231-252.

    More about this item

    Keywords

    Environmental contamination; Commercial property; Underground storage tanks; Contingent valuation analysis;

    JEL classification:

    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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