Noise Effects ' 98 SYDNEY - AUSTRALIA 22 - 26 NOVEMBER 1998

1. KEY ISSUES Transportation noise can be regarded as a major environmental impact, particularly in residential areas. Its cost could represent close to 0.5 % of GDP in the European Union [1]. Considerable amounts of money are spent each year by the community to prevent or limit noise, through both the enforcement of regulations (emission and immission) and the use of economic instruments (charges, incentives). Unfortunately, the financial resources of the community are limited. Consequently, integrating noise concerns into economic decisions clearly needs more rationality [2]. For the economist, this basic issue raises two main problems: ∑ How can noise annoyance be evaluated, and by what methods? What are the limits of these methods: theoretical, practical, ethical? Are these methods acceptable to scientists as well as operators and political decision makers? Can monetary values be transferred from one study and used as inputs into other policy-making activities? ∑ What economic decisions are influenced by the use of monetary values of noise: cost-benefit analysis of infrastructure projects, noise abatement measures or policies, compensation of residents exposed to high noise levels, charging for transport infrastructure and, more generally, internalisation of noise costs. The economic value of noise derives from a willingness to pay (WTP). Sometimes WTP reflects impacts to the extent that individuals are aware of them and sometimes the amount of money that society or individuals will agree to pay to reduce or prevent transportation noise. Various techniques are available for valuing noise [Table 1], but the hedonic price and contingent valuation methods are at present the most commonly used [3].