A2.14 Activities such as waste disposal and quarrying of minerals and aggregates have social costs such as noise, congestion, dust, odours and visual intrusion. These can undermine public enjoyment of an area and generate adverse health impacts. Land contaminated from past industrial activity and pollution can also result in costs to society. Interventions that address these problems can generate benefits to residents, visitors and businesses.
A2.15 Hedonic pricing studies use econometric techniques to estimate a value for a good or service from a related market. The technique has been used to estimate the value of a wide range of environmental costs and benefits as they are reflected in local property prices. For example, analysis of house prices suggests that proximity to habitats, designated areas, heritage sites, domestic gardens and other natural amenities can add as much as £68,000 to the price of a £200,000 house in the UK, a premium of one-third.26
A2.16 Hedonic valuation techniques using property price data help estimate relevant amenity values.27 Research for Defra on the value of remediating contaminated land identified statistically significant differences in local property prices from remediation in a number of case study sites. More generally, changes in amenity value will depend on many factors including local circumstances, population density and the environmental change in question. Therefore, care needs to be taken in using or transferring values from existing studies. Amenity value can potentially overlap with local recreational values so where both are being used, care should be taken not to double count. In addition, property value effects reflect capitalised rather than annual changes in value.
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26 Gibbons et al. (2014) "The amenity value of English nature: a hedonic price approach" Environmental Resource Economics, 57: pp. 175-196.
27 For eample, see Ham et al. (2013) "The valuation of landfill disamenities in Birmingham" Ecological Economics, 85: pp. 116-129.