Katherine A. Kiel

Estimating the Economic Benefits of Cleaning Up Superfund Sites: The Case of Woburn, Massachusetts

Superfund was established in 1980 to deal with closed and abandoned hazardous waste sites. Given the large amounts of money being spent on cleanups of Superfund sites, one might hope that the money is being spent in a cost-effective manner, but there is little evidence that the estimated benefits from cleanup affect the cleanup decision. We apply the hedonic method to house prices to estimate the individual willingness to pay (WTP) to clean up a Superfund site. We then show how the individual WTP can be used to calculate the total benefits from cleaning up the site so that a cost-benefit analysis of Superfund cleanup can be undertaken. We apply our technique to the two Superfund sites in Woburn, Massachusetts. We find that the benefits from cleaning up these sites are in the range of

Evaluating the Usefulness of the American Housing Survey for Creating House Price Indices

72 million to

House price recovery and stigma after a failed siting

122 million (1992 dollars). It is likely that these benefits are greater than the present value of the estimated costs of cleaning up these sites. Thus it appears that the cleanup of the Woburn Superfund sites results in positive net benefits to society.

A SURVEY OF HOUSE PRICE HEDONIC STUDIES OF THE IMPACT OF ENVIRONMENTAL EXTERNALITIES

The American Housing Survey (AHS) is a valuable source of information on houses and occupants over time. The AHS has several advantages over sales data for use in the creation of price indices: it is readily available, has frequent observations over time and space, has data from the late 1970s through the mid-1990s, includes houses that do not sell, as well as those that do, and has information on the occupants. The drawbacks include: a time lag between the interview and the release of the data, data suppression issues, owner-stated house values, and a lack of neighborhood information. In this study, we use the metropolitan version of the AHS, which has been supplemented with the original survey data as well as Census tract data for three cities over 14 years to examine whether the AHS can be used to create indices. Indices are estimated using hedonic, repeat valuation, and hybrid techniques, overcoming some of the problems inherent in the estimation of indices. We find that the data-suppression issues and the owner-stated house values are not problematic. The biggest drawback of the AHS is its lack of objective information on neighborhood quality.

House Prices during Siting Decision Stages: The Case of an Incinerator from Rumor through Operation

The costs of siting a locally undesirable facility include those borne by developers, local government, and those homeowners whose houses decline in value. When a siting fails, developer and government costs are still incurred, in addition to the costs of community opposition. However, the impact of a failed siting on residential real estate prices has not been assessed. In this study, house prices in a market surrounding a failed incinerator are examined. While proposing an incinerator did negatively impact house values, prices rebounded after the facility was cancelled. Residents did not attach any stigma to the site.