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Determining Market Perceptions on Contamination of Residential Property Buyers using Contingent Valuation Surveys


  • Robert A. Simons

    () (Maxine Goodman Levin College of Urban Affairs, 1717 Euclid Avenue UR223, Cleveland State University, Cleveland OH 44115)

  • Kimberly Winson-Geideman

    () (Department of Political Science and Public Administration, Savannah State University, PO Box 20385, Savannah, Georgia 31404)


This study reports on the results of several residential contingent valuation (CV) studies conducted throughout the US. Over the past several years CV has often been used to illustrate potential residential buyer bid prices for contaminated real property. The data set for this study contains 1,115 telephone interviews and examines the consistency of the results for residential property affected by a Leaking Underground Storage Tank (LUST) in different markets in eight states, controlling for income, age, education, local market type, and other demographic factors. Negative discounts associated with a LUST for marginal bidders in the top half of the market were quite consistent across states, varying from ?25% to ?33%, with an average of ?31%,. Using ANOVA indicates that bidding patterns from six of the seven states were statistically similar. Male bidders, those over 40 years of age and those with no high school degree were more likely to bid, while those with higher incomes and those bidding on certain, rather than suspected contamination, were less likely to bid. Local market type did not appear to affect bid outcomes. Using the marginal bidder approach, the CV results benchmark reasonably closely to, but still higher than, revealed preference outcomes for residential LUST sites in Ohio.

Suggested Citation

  • Robert A. Simons & Kimberly Winson-Geideman, 2005. "Determining Market Perceptions on Contamination of Residential Property Buyers using Contingent Valuation Surveys," Journal of Real Estate Research, American Real Estate Society, vol. 27(2), pages 193-220.
  • Handle: RePEc:jre:issued:v:27:n:2:2005:p:193-220

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    References listed on IDEAS

    1. Robert A. Simons & William Bowen & Arthur Sementell, 1997. "The Effect of Underground Storage Tanks on Residential Property Values in Cuyahoga County, Ohio," Journal of Real Estate Research, American Real Estate Society, vol. 14(1), pages 29-42.
    2. 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.
    3. Rowe, Robert D. & D'Arge, Ralph C. & Brookshire, David S., 1980. "An experiment on the economic value of visibility," Journal of Environmental Economics and Management, Elsevier, vol. 7(1), pages 1-19, March.
    4. Paul R. Portney, 1994. "The Contingent Valuation Debate: Why Economists Should Care," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 3-17, Fall.
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    Cited by:

    1. Robin R. Jenkins & Dennis Guignet & Patrick J. Walsh, 2014. "Prevention, Cleanup, and Reuse Benefits from the Federal UST Program," NCEE Working Paper Series 201405, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Nov 2014.
    2. Dennis Guignet & Anna Alberini, 2013. "Can Property Values Capture Changes in Environmental Health Risks? Evidence from a Stated Preference Study in Italy and the UK," Working Papers 2013.67, Fondazione Eni Enrico Mattei.
    3. Robert A. Simons & Jesse Saginor & Aly H. Karam & Hlengani Baloyi, 2008. "Use of Contingent Valuation Analysis in a Developing Country: Market Perceptions of Contamination on Johannesburg’s Mine Dumps," International Real Estate Review, Asian Real Estate Society, vol. 11(2), pages 75-104.
    4. Anna Alberini & Dennis Guignet, 2010. "Preliminary Stated-Preference Research on the Impact of LUST Sites on Property Values: Focus Group Results," NCEE Working Paper Series 201009, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Aug 2010.
    5. Guignet, Dennis, 2012. "The impacts of pollution and exposure pathways on home values: A stated preference analysis," Ecological Economics, Elsevier, vol. 82(C), pages 53-63.

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    JEL classification:

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


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