Measuring Externalities of Waste Transfer-Station Using Hedonic Prices: Case study, Israel

Waste transfer-stations play an important role in a community’s waste management system, serving as the link between a community’s solid waste collection program and a final waste disposal facility. This study aims to estimate economic values of externalities related to waste transfer-stations in Israel. Most externalities are associated with local disamenities experienced by residents living in close proximity to transfer-stations – including noise (of trucks traveling back and forth), odor, litter, vermin, visual intrusion and any associated perceived discomfort. Practically, all these factors are often reflected in the NIMBY phenomenon (Not In My Back Yard) and activism intensity. Following the mapping of all active transfer-stations in Israel, more than ten problematic sites nearby residential areas were identified. Four sites from them were selected for detailed examination. The study estimates the economic valuation of disamenities via Hedonic Price Method (HPM) that examines the impact of disamenities on prices of houses. Based on regression results, maximum extent of impacts of disamenities is about 2.8 km away from a transfer-station; with an increase of about $5,000 to house value per 1 km move from the site. More generally, extra 10% to average distance of a house from the local transfer station is associated with 0.6% rise in the price of the average house. These figures that represent the relationship between changes in environmental quality-level and property prices show that transfer-stations create social costs that should be regarded in location and clean-up policy of transfer-stations as well as in potential compensation policy.