Essays on the Economic Value of Environmental Cleanup
We offer three different essays on economic values of environmental cleanup. The first essay summarizes and integrates the previous noxious and hazardous site evaluation studies by a meta analysis. We find that the property value is the most sensitive to water base contamination, published case studies result in systematically greater environmental value than those in unpublished reports, and real estate markets show responses to environmental condition changes. The second study uses sales and assessment data together with survey responses to estimate the local welfare gains to property owners from the cleanup of a contaminated site. This study indicates that home owners' average willingness to pay (WTP) for full cleanup of Sheboygan River is equivalent to $12, 247. The average WTP for full cleanup in Buffalo is $7,833. In addition, we examine the importance of heterogeneous preference by including both demographic characteristics and psychometric data in the model specifications. We find that the psychometric data do not seem to add much beyond the demographic variables. The third essay focuses on the potential spillover from cleanup. We find that households express greater WTP for cleanup of the Lower Buffalo River AOC than to avoid its stigma by moving away. The difference of WTPs might be caused by an environmental premium, a spillover from cleanup. Where it occurs, property values should rebound by more than the discounts evident in the presence of contamination.
University of Illinois - Urbana-Champaign
Networked Digital Library of Theses and Dissertations
University of Illinois at Urbana-Champaign