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Sanitary Landfills, Stigma and Industrial Land Values

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Abstract

A significant literature exists that documents reductions in property value around toxic, chemical and in some cases solid waste landfills. There is also an emerging literature on stigma-related damage, which can be defined as a loss in value due to the increased risk associated with a contaminated property even after the problem has been eliminated. This research extends the empirical literature on landfills by examining the impact that solid waste landfills have on surrounding industrial property. The results indicate that the value of industrial land around an open, solid waste landfill is reduced by the presence of the landfill. Property around closed, solid waste landfills and open and closed refuse landfills is not adversely affected by the landfills. These results are not affected by the presence or absence of methane gas controls and ground water monitoring systems. Landfills sold with industrial zoning are discounted substantially by the market for various reasons, probably including limited alternative future uses, costs of remediation and potential liability from being in the chain of title.

Suggested Citation

  • Karl L. Guntermann, 1995. "Sanitary Landfills, Stigma and Industrial Land Values," Journal of Real Estate Research, American Real Estate Society, vol. 10(5), pages 531-542.
  • Handle: RePEc:jre:issued:v:10:n:5:1995:p:531-542
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    References listed on IDEAS

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    1. N/A, 1991. "Appraisal," National Institute Economic Review, National Institute of Economic and Social Research, vol. 138(1), pages 3-5, November.
    2. Mark Thayer & Heidi Albers & Morteza Rahmatian, 1992. "The Benefits of Reducing Exposure to Waste Disposal Sites: A Hedonic Housing Value Approach," Journal of Real Estate Research, American Real Estate Society, vol. 7(3), pages 265-282.
    3. Smith, V Kerry & Desvousges, William H, 1986. "The Value of Avoiding a Lulu: Hazardous Waste Disposal Sites," The Review of Economics and Statistics, MIT Press, vol. 68(2), pages 293-299, May.
    4. Kohlhase, Janet E., 1991. "The impact of toxic waste sites on housing values," Journal of Urban Economics, Elsevier, vol. 30(1), pages 1-26, July.
    5. Alan K. Reichert & Michael Small & Sunil Mohanty, 1992. "The Impact of Landfills on Residential Property Values," Journal of Real Estate Research, American Real Estate Society, vol. 7(3), pages 297-314.
    6. Michaels, R. Gregory & Smith, V. Kerry, 1990. "Market segmentation and valuing amenities with hedonic models: The case of hazardous waste sites," Journal of Urban Economics, Elsevier, vol. 28(2), pages 223-242, September.
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    Cited by:

    1. Sean P. Salter & Ernest W. King, 2009. "Price Adjustment and Liquidity in a Residential Real Estate Market with an Accelerated Information Cascade," Journal of Real Estate Research, American Real Estate Society, vol. 31(4), pages 421-454.
    2. Stefania Tonin & Margherita Turvani, 2011. "Environmental contamination and industrial real estate market: an application of hedonic price method in Italy," ERSA conference papers ersa10p511, European Regional Science Association.
    3. Ham, Yun-Ju & Maddison, David J. & Elliott, Robert J.R., 2013. "The valuation of landfill disamenities in Birmingham," Ecological Economics, Elsevier, vol. 85(C), pages 116-129.
    4. John Braden & Xia Feng & DooHwan Won, 2011. "Waste Sites and Property Values: A Meta-Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 50(2), pages 175-201, October.
    5. Carmelo J. León & Jorge E. Araña & Javier León & Matías M. González, 2016. "The Economic Benefits of Reducing the Environmental Effects of Landfills: Heterogeneous Distance Decay Effects," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 63(1), pages 193-218, January.
    6. Ihlanfeldt, Keith R. & Taylor, Laura O., 2004. "Externality effects of small-scale hazardous waste sites: evidence from urban commercial property markets," Journal of Environmental Economics and Management, Elsevier, vol. 47(1), pages 117-139, January.

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    JEL classification:

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

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