Superfund was established in 1980 to deal with closed and abandoned hazardous waste sites. Given the large amounts of money being spent on cleanups of Superfund sites, one might hope that the money is being spent in a cost-effective manner, but there is little evidence that the estimated benefits from cleanup affect the cleanup decision. We apply the hedonic method to house prices to estimate the individual willingness to pay (WTP) to clean up a Superfund site. We then show how the individual WTP can be used to calculate the total benefits from cleaning up the site so that a cost-benefit analysis of Superfund cleanup can be undertaken. We apply our technique to the two Superfund sites in Woburn, Massachusetts. We find that the benefits from cleaning up these sites are in the range of $72 million to $122 million (1992 dollars). It is likely that these benefits are greater than the present value of the estimated costs of cleaning up these sites. Thus it appears that the cleanup of the Woburn Superfund sites results in positive net benefits to society.
This is a preview of subscription content, access via your institution.
Buy single article
Instant access to the full article PDF.
Tax calculation will be finalised during checkout.
American Chemical Society and Resources for the Future. (1998). Understanding Risk Analysis.
Berggren, J. (2000). EPA Records Manager for the Region I Office. Personal conversation, April 7, 2000.
Dale, L., J. C. Murdoch, M. A. Thayer, and P. A. Waddell. (1999). “Do Property Values Rebound from Environmental Stigmas?” Land Economics 75, 311–326.
Farber, S. (1998). “Undesirable Facilities and Property Values: A Summary of Empirical Studies,” Ecological Economics 24, 1–14.
Freeman, A. M., III. (1993). The Measurement of Environmental and Resource Values. Washington, DC: Resources for the Future.
Garren, M. (1999). EPA Project Manager for the Wells G & H site. Personal conversation, March 5, 1999.
Gupta S., G. Van Houtven, and M. L. Cropper. (1995). “Do Benefits and Costs Matter in Environmental Regulation? An Analysis of EPA Decisions Under Superfund” In R. L. Revez and R. B. Stewart (eds.), Analyzing Superfund: Economics, Science, and Law. Washington, DC: Resources for the Future.
Hamilton, J. T., and W. K. Viscusi. (1999). “How Costly Is ‘Clean'? An Analysis of the Benefits and Costs of Superfund Site Remediations,” Journal of Policy Analysis and Management 18(1), 2–27.
Harr, J. (1996). A Civil Action. New York: Vintage Books.
Harrison, D., and J. H. Stock. (1984). Hedonic Housing Values, Local Public Goods, and the Benefits of Hazardous Waste Cleanup. Unpublished mimeo, John F. Kennedy School of Government, Harvard University.
Hird, J. A. (1990). “Superfund Expenditures and Cleanup Priorities: Distributive Politics or the Public Interest?” Journal of Policy Analysis and Management 9, 455–483.
Hird, J. A. (1993). “Environmental Policy and Equity: The Case of Superfund,” Journal of Policy Analysis and Management 12, 323–343.
Hite, D. (1998). “Information and Bargaining in Markets for Environmental Quality,” Land Economics 74, 303–316.
Ketkar, K. (1992). “Hazardous Waste Sites and Property Values in the State of New Jersey,” Applied Economics 24, 647–659.
Kiel, K. A. (1995). “Measuring the Impact of the Discovery and Cleaning of Identified Hazardous Waste Sites on House Values,” Land Economics 71, 428–435.
Kiel, K. A., and J. E. Zabel. (1996). “House Price Differentials in U.S. Cities: Household and Neighborhood Racial Effects,” Journal of Housing Economics 5, 143–165.
Kiel, K. A., and J. E. Zabel. (1997a). “Compensation Estimates for Homeowners for Environmental Disamenities,” 1996 Proceedings of the Eighty-Ninth Annual Conference on Taxation, National Tax Association 196–202.
Kiel, K. A., and J. E. Zabel. (1997b). “Evaluating the Usefulness of the American Housing Survey for Creating House Price Indices,” Journal of Real Estate Finance and Economics 14, 189–202.
Kohlhase, J. (1991). “The Impact of Toxic Waste Sites on Housing Values,” Journal of Urban Economics 30, 1–26.
LeMay, J. (1999). EPA Project Manager for the Industri-Plex Site. Personal conversation, March 10, 1999.
McClelland, G. M., W. D. Schulze, and B. Hurd. (1990). “The Effect of Risk Beliefs on Property Values: ACase Study of a Hazardous Waste Site,” Risk Analysis 10(4), 485–497.
Probst, K. N., D. Fullerton, R. E. Litan, and P. R. Portney. (1995). Footing the Bill for Superfund Cleanups: Who Pays and How? Washington, DC: Brookings Institution and Resources for the Future.
Revez R. L., and R. B. Stuart. (1995). “The Superfund Debate.” In R. L. Revez and R. B. Stewart (eds.), Analyzing Superfund: Economics, Science, and Law. Washington, DC: Resources for the Future.
Rosen, S. (1974). “Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition,” Journal of Political Economy 82, 34–55.
Thayer, M., H. Albers, and M. Rahmatian. (1992). “The Benefits of Reducing Exposure to Waste Disposal Sites: A Hedonic Housing Value Approach,” Journal of Real Estate Research 7, 265–282.
U.S. Environmental Protection Agency (EPA). (1998). “Superfund Facts: The Program at Work,” http://www.epa.gov/superfund/new/facts57.htnm.
U.S. Environmental Protection Agency (EPA). (1998b). “Wells G & H Massachusetts: Site Summary,” http://www.epa.gov/region01/remed/sfsites/wellsgh/hpl.html.
U.S. Environmental Protection Agency (EPA). (1999a). “Industri-Plex, Massachusetts,” EPA ID MADD 76580950.
U.S. Environmental Protection Agency (EPA). (1999b). “Industri-Plex Site, Woburn Massachusetts: A Superfund Redevelopment Success,” EPA 540/F-98/012.
U.S. Environmental Protection Agency (EPA). (1999c). “Wells G & H Fact Sheet,” http://www.epa.gov/ region01/remed/sfsites/wellsgh/factsh.htnml.
U.S. Environmental Protection Agency (EPA). (1999d). “Wells G & H Settlement,” http://www.epa.gov/ region01/remed/sfsites/wellsgh/settle.htnml.
Viscusi, W. K., and J. T. Hamilton. (1999). “Are Risk Regulators Rational? Evidence from Hazardous Waste Cleanup Decisions,” American Economic Review 89(4), 1010–1027.
Walker, K. D., M. Sadowitz, and J. D. Graham. (1995). “Confronting Superfund Mythology: The Case of Risk Assessment and Management.” In R. L. Revez and R. B. Stewart (eds.), Analyzing Superfund: Economics, Science, and Law. Washington, DC: Resources for the Future.
Yinger, J., H. S. Bloom, A. Börsch-Supan, and H. F. Ladd. (1988). Property Taxes and House Values: The Theory and Estimation of Intrajurisdictional Property Tax Capitalization. San Diego: Academic Press.
About this article
Cite this article
Kiel, K., Zabel, J. Estimating the Economic Benefits of Cleaning Up Superfund Sites: The Case of Woburn, Massachusetts. The Journal of Real Estate Finance and Economics 22, 163–184 (2001). https://doi.org/10.1023/A:1007835329254
- benefits from cleanup
- house price models