Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/76630 
Year of Publication: 
2004
Series/Report no.: 
CESifo Working Paper No. 1163
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
Inhabitants of houses near Amsterdam Airport are complaining of noise nuisance, caused by aircraft traffic. The usual assumption is that the effect of the externality will be perfectly reflected by house price differentials. This is based on the implicit assumption that there is a well-functioning housing market. If that is not true, we need a correction method in order to assess the intangible damage. We assess the monetary value of the noise damage, caused by aircraft noise nuisance around Amsterdam Airport as the sum of hedonic price differentials and a residual cost component. The residual costs are assessed from a survey, including an ordinal life satisfaction scale, on which individual respondents have scored. The derived compensation scheme depends on, among other things, the objective noise level, income, the degree to which prices account for noise differences, and the presence of noise insulation.
Subjects: 
cost-benefit analysis
externalities
airport noise
satisfaction analysis
residual shadow costs
Document Type: 
Working Paper
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