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Charging the polluters: A pricing model for road and railway noise

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This study outlines a method to estimate the short run marginal cost (SRMC) for road and railway noise. It is based on standardized calculation methods for total noise levels and monetary cost estimates from well established evaluation methods. Here official calculation methods and monetary values are used for Sweden, but the estimation method for the SRMC outlined can be directly applied using other standardized noise calculation methods and monetary values. This implies that the current knowledge regarding the calculation of total noise levels and the evaluation of the social cost of noise can be extended to estimate the marginal effect as well. This is an important finding since it enables policy makers to price noise externalities in an appropriate way. Several sensitivity tests run for the SRMC show that: (i) increasing the total traffic on the infrastructure has only a minor influence, (ii) estimates are quite sensitive to the number of exposed individuals, and (iii) to the monetary values used. Hence, benefits transfer, i.e. using monetary values elicited based on road noise for railway noise, should be done with caution or not at all. Results also show that the use of quiet technology can have a significant effect on the SRMC. The fact that this model is able to differentiate not only modes of transport, but also vehicles and even technologies is an important finding. It is essential that the noise charges give the operators the right incentives to choose their optimal allocation.

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  • Andersson, Henrik & Ögren, Mikael, 2010. "Charging the polluters: A pricing model for road and railway noise," Working Papers 2010:15, Swedish National Road & Transport Research Institute (VTI).
    • Handle: RePEc:hhs:vtiwps:2010_015
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    1. Jon P. Nelson, 2008. "Hedonic Property Value Studies of Transportation Noise: Aircraft and Road Traffic," Springer Books, in: Andrea Baranzini & José Ramirez & Caroline Schaerer & Philippe Thalmann (ed.), Hedonic Methods in Housing Markets, chapter 3, pages 57-82, Springer.
    2. Rothengatter, Werner, 2003. "How good is first best? Marginal cost and other pricing principles for user charging in transport," Transport Policy, Elsevier, vol. 10(2), pages 121-130, April.
    3. Nijland, H. A. & Van Kempen, E. E. M. M. & Van Wee, G. P. & Jabben, J., 2003. "Costs and benefits of noise abatement measures," Transport Policy, Elsevier, vol. 10(2), pages 131-140, April.
    4. Henrik Andersson & Lina Jonsson & Mikael Ögren, 2010. "Property Prices and Exposure to Multiple Noise Sources: Hedonic Regression with Road and Railway Noise," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(1), pages 73-89, January.
    5. Brett Day & Ian Bateman & Iain Lake, 2007. "Beyond implicit prices: recovering theoretically consistent and transferable values for noise avoidance from a hedonic property price model," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 37(1), pages 211-232, May.
    6. Andersson, Henrik & Ögren, Mikael, 2007. "Noise charges in railway infrastructure: A pricing schedule based on the marginal cost principle," Transport Policy, Elsevier, vol. 14(3), pages 204-213, May.
    7. Niskanen, William A & Hanke, Steve H, 1977. "Land Prices Substantially Underestimate the Value of Environmental Quality," The Review of Economics and Statistics, MIT Press, vol. 59(3), pages 375-377, August.
    8. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    9. Chris Nash, 2005. "Rail Infrastructure Charges in Europe," Journal of Transport Economics and Policy, University of Bath, vol. 39(3), pages 259-278, September.
    10. Andersson, Henrik & Jonsson, Lina & Ögren, Mikael, 2010. "Benefit measures for noise abatement: Calculations for road and rail traffic noise," LERNA Working Papers 10.17.323, LERNA, University of Toulouse.
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    1. Swärdh, Jan-Erik & Genell, Anders, 2020. "Marginal costs of road noise: Estimation, differentiation and policy implications," Transport Policy, Elsevier, vol. 88(C), pages 24-32.
    2. Rødseth, Kenneth Løvold, 2023. "Noise pollution of container handling: External and abatement costs and environmental efficiency," Transport Policy, Elsevier, vol. 134(C), pages 82-93.

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    More about this item

    Keywords

    Externalities; Marginal cost; Noise; Railway; Road;
    All these keywords.

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • Q51 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Valuation of Environmental Effects
    • R41 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Transportation Economics - - - Transportation: Demand, Supply, and Congestion; Travel Time; Safety and Accidents; Transportation Noise

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