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

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 $72 million to $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. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png The Journal of Real Estate Finance and Economics Springer Journals

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

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Publisher
Kluwer Academic Publishers
Copyright
Copyright © 2001 by Kluwer Academic Publishers
Subject
Economics; Regional/Spatial Science; Financial Services
ISSN
0895-5638
eISSN
1573-045X
D.O.I.
10.1023/A:1007835329254
Publisher site
See Article on Publisher Site

Abstract

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 $72 million to $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.

Journal

The Journal of Real Estate Finance and EconomicsSpringer Journals

Published: Oct 3, 2004

References

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