Multiple regression analysis was applied to a new cross section data set for the Kanawha Valley, West Virginia single family residential housing market to test the hypotheses that (1) individuals are willing to pay for freedom from exposure to hazardous materials released in an acute pollution event at a chemical plant and (2) there is an announcement effect on local property values following an actual catastrophic hazardous materials incident elsewhere. / Since reductions in the risk of exposure to hazardous materials are provided by distance from potentially hazardous facilities, economic theory predicts that if individuals are willing to pay for reductions in their risk of exposure, then property values will increase with distance from potentially hazardous facilities. Economic theory also predicts that as people have more experience with and thus become more cognizant of the consequences of a leak, spill or explosion of toxic chemicals, they increase their willingness to pay for the safety that is provided by distance from potentially hazardous areas. / Property value models were constructed to test the first hypothesis. Each model is a hedonic equation that relates residential property values (measured by sale prices) to a measure of the risk of exposure to hazardous materials as well as other factors that influence the value of housing. The results of OLS estimation of the models provided support for the hypothesis that individuals are willing to pay for reductions in their exposure to hazardous materials and that the market capitalizes this value into residential property values. These findings suggest that individuals have to be compensated in the form of lower housing expenditures to purchase property in areas with an elevated risk of exposure to toxic materials. / In tests of the second hypothesis property value models were estimated to determine if Kanawha Valley property values fell following the announcement of the December 3, 1984 catastrophic leak of methyl isocyanate from a Union Carbide plant in Bhopal, India. Results of these tests provide empirical evidence that the announcement of this event did have a depressing effect on area property values. This finding implies that the compensation necessary to induce people to purchase property in risky areas increases as they become more aware of the potential for and the consequences of a catastrophic hazardous materials incident. / Source: Dissertation Abstracts International, Volume: 47-12, Section: A, page: 4452. / Thesis (Ph.D.)--The Florida State University, 1986.
| Identifer | oai:union.ndltd.org:fsu.edu/oai:fsu.digital.flvc.org:fsu_75959 |
| Contributors | BAKER, MARY DUNN., Florida State University |
| Source Sets | Florida State University |
| Detected Language | English |
| Type | Text |
| Format | 186 p. |
| Rights | On campus use only. |
| Relation | Dissertation Abstracts International |
Page generated in 0.001 seconds