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The Shadow Price of Aircraft Noise Nuisance

Author

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  • Bernard M.S. van Praag

    (University of Amsterdam)

  • B.E. Baarsma

    (University of Amsterdam)

Abstract

This paper has a twofold objective. First, we develop a new method toassess the monetary value for individuals of external effects (viz., aircraftnoise nuisance) which are not or only partly internalized in market prices. The method makes use of an ordinal index of life satisfaction as scored by individual respondents who are subjected in varying intensity to the external effect. Our second objective is to assess, with this method, to what extent noise nuisance effects around Amsterdam Airport Schiphol are internalizedand what should be the monetary compensation for the nuisance. Such acompensation scheme depends on, among other things, the objective noise level,income and the presence of noise insulation. The results are both significant and plausible. The method is generally applicable.

Suggested Citation

  • Bernard M.S. van Praag & B.E. Baarsma, 2000. "The Shadow Price of Aircraft Noise Nuisance," Tinbergen Institute Discussion Papers 00-004/3, Tinbergen Institute.
  • Handle: RePEc:tin:wpaper:20000004
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    References listed on IDEAS

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    1. Oswald, Andrew J, 1997. "Happiness and Economic Performance," Economic Journal, Royal Economic Society, vol. 107(445), pages 1815-1831, November.
    2. Blanchflower, David G. & Oswald, Andrew J., 2004. "Well-being over time in Britain and the USA," Journal of Public Economics, Elsevier, vol. 88(7-8), pages 1359-1386, July.
    3. Van Praag, Bernard, 1971. "The welfare function of income in Belgium: An empirical investigation," European Economic Review, Elsevier, vol. 11(3), pages 337-369.
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    6. Menno Pradhan & Martin Ravallion, 2000. "Measuring Poverty Using Qualitative Perceptions Of Consumption Adequacy," The Review of Economics and Statistics, MIT Press, vol. 82(3), pages 462-471, August.
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    Cited by:

    1. Carlsson, Fredrik & Lampi, Elina & Martinsson, Peter, 2004. "Measuring marginal values of noise disturbance from air traffic: Does the time of the day matter?," Working Papers in Economics 125, University of Gothenburg, Department of Economics.
    2. Bernard M. S. van Praag & Barbara E. Baarsma, 2005. "Using Happiness Surveys to Value Intangibles: The Case of Airport Noise," Economic Journal, Royal Economic Society, vol. 115(500), pages 224-246, January.
    3. Carlsson, Fredrik, 2002. "Airport Marginal Cost Pricing: Discussion and an Application to Swedish Airports," Working Papers in Economics 85, University of Gothenburg, Department of Economics.
    4. David Meintrup & Chang Woon Nam, 2009. "Shadow Market Area for Air Pollutants," Environment and Planning B, , vol. 36(4), pages 664-681, August.
    5. van Praag, B. M. S. & Frijters, P. & Ferrer-i-Carbonell, A., 2003. "The anatomy of subjective well-being," Journal of Economic Behavior & Organization, Elsevier, vol. 51(1), pages 29-49, May.
    6. Hostenkamp, Gisela & Stolpe, Michael, 2006. "The health gradient and early retirement: Evidence from the German Socio-economic Panel," Kiel Working Papers 1305, Kiel Institute for the World Economy (IfW).

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    More about this item

    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; Discrete Regressors; Proportions; Probabilities

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