Does size really matter? Landfill scale impacts on property values

Abstract

The economic advantage of constructing and operating large-scale landfills over small-scale landfills has been used to justify regional landfills as a solution to the municipal waste disposal problem. In addition to the dampening effects on social efforts to divert waste away from landfills, higher external costs of larger landfills may in fact offset the private cost advantages. In this study, the negative effects of a landfill that are capitalized in property values of houses located in the proximity of two landfill sites of significantly different sizes in Toronto, Canada, are examined. The results suggest that larger landfills have greater adverse impacts on property values than smaller landfills, implying consumers perceive (and markets reflect) differences in external costs.

Notes

¹ O’Leary and Walsh( 2002) report that the number of municipal solid waste landfills in the United states has declined from 7379 in 1989 to 2216 in 1999. Capacity, however, has remained relatively constant.

² It has also been postulated that larger landfills are conductive to the generation of larger waste volumes. For example, the effectives of recycling programmes is are influenced by landfill capacity (Highfill and McAsey, 1997, 2001).

³ When all attributes are observed, linear and quadratic Box–Cox forms provide the most accurate estimates of marginal attribute prices, but when certain variables are not observed, a simple linear function consistently outperforms the quadratic Box-Cox function as well as other specifications (Cropper et al . 1997).

⁴ The New Housing Price Index is a monthly series that measures changes over time in the contractors’ selling prices of new residential houses, where detailed specification pertaining to each house remain the same between two consecutive periods. The base period was 1992.