Valuing the risk attached with living close to a hazardous waste site : the case of the BT Kemi scandal in Teckomatorp

Detta är en Magister-uppsats från Uppsala universitet/Nationalekonomiska institutionen

Sammanfattning:

In this thesis I estimate a monetary value of the risk attached to living near a hazardous waste

site in the town of Teckomatorp. This site is the result of hundreds of rusty leaking barrels of

toxins being buried in the ground by the company BT Kemi in the 1970’s. Ever since then the

site has been remediated in several steps and is still contaminated today. For estimating the

perceived risk of living near this site I use a hedonic price model (HP) which is a form of a

revealed preference approach. In a HP model the price of a market good is a function of

different utility-bearing characteristics and the estimated parameters can be used to calculate

the implicit prices of these characteristics. In this case I use a data set from the National

Swedish Institute for Building Research (IBF) and regress property price on a number of

housing characteristics. I compare an estimated town-effect for Teckomatorp with the

estimates for two control towns: Billeberga and Anderslöv. I can confirm my hypothesis that,

after controlling for housing characteristics, there is a negative effect on prices of property in

Teckomatorp. I find that property prices are on average 46878 SEK lower in Teckomatorp

than in the two control towns.

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