Measuring externalities of waste transfer stations in Israel using hedonic pricing

This study estimates the economic value 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, odor, litter, vermin, visual intrusion and any associated perceived discomfort. Following the mapping of all active transfer stations in Israel, problematic sites near residential areas were identified. Four of these sites were selected for detailed examination. The study involved estimating the economic value of disamenities using the Hedonic Price Method, which examines the impact of disamenities on property values. The results indicate that the maximum spatial extent of the impact occurs about 2.8 km away from a transfer station with an increase of about $5000 in housing price for each additional km away from the site. Alternatively, an increase of 1% in the average distance of a house from the local transfer station is associated with a 0.06% rise in the price of the average house. These figures, representing the relationship between changes in environmental quality and property prices, indicate that transfer stations create externalities that should be taken into account in location and clean-up policies for transfer stations as well as in potential compensation policies.