Estimating non-marginal willingness to pay for railway noise abatements: application of the two-step hedonic regression technique

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Henrik Andersson
Lina Jonsson
Mikael Ögren

In this study we estimate the willingness to pay for railway noise abatements based on the effect of railway noise on property prices. We estimate both steps of the hedonic regression technique on a large data set of different Swedish regions which contains detailed information about railway noise along with socioeconomic characteristics for each property/household. The estimated demand relationship suggest welfare gains for a 1 dB reduction of railway noise as; 1240 SEK per individual and year at the baseline noise level of 71 dB, and 661 SEK at the baseline noise level of 61 dB. Below a noise level of 49.09 dB, individuals have no willingness to pay for railway noise abatements. In policy, these results can be used for cost benefit analysis and to derive marginal costs for infrastructure charges.

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