The study shows that the existence of the nearby waste incinerating facility-one of the typically disfavored urban facilities with negative externalities-is an important factor among the neighborhood attributes that constitute the implicit housing pri...
The study shows that the existence of the nearby waste incinerating facility-one of the typically disfavored urban facilities with negative externalities-is an important factor among the neighborhood attributes that constitute the implicit housing price, and is as important an attribute as many other categorical characteristics of the apartment housing in the intricate urban setting. As one might generally concern, the waste incinerating facility clearly reduces the asset value of the surrounding apartment houses. The hedonic approach made in the study is intended to contribute to the empirical and quantitative estimation of the negative externalities and to finding a useful implication for the public sector to cope better with the urban environmental issues on the residential areas.
It is shown that the waste incinerating facility clearly reduces the asset values of the surrounding apartment houses so that the strong claims from the neighborhood residents against the initial attraction of the facility to the area by the localities are seen valid from the equity point of view. Nevertheless, the social cost accrued from the location of the facility has actually been excluded from the estimated compensation for the residents: hence it could have been a matter of course that the incident has perked up as a hot social issue at the time. One plausible way for the localities to avoid such a conflict is to systemize the appropriate compensating standards strictly based on the direct and matching economic trade-offs. In this context, the hedonic approach made in the study might contribute not only to the empirical and quantitative revelation of the externalities for the academic purpose at hand but also to the implication that could usefully be adopted by the localities to hammer out a proper provision of the systematic compensation mechanisms.