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8/19/2019 Estimating the Cost of Noise Pollution in France
1/3
Royal Swedish cademy of Sciences
Estimating the Cost of Noise Pollution in FranceAuthor(s): David Pearce, Jean-Philippe Barde and Jacques LambertSource: Ambio, Vol. 13, No. 1 (1984), pp. 27-28Published by: Springer on behalf of Royal Swedish Academy of SciencesStable URL: http://www.jstor.org/stable/4312978 .
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8/19/2019 Estimating the Cost of Noise Pollution in France
2/3
woodfuel to
the urban
population on
a
rationaland
plannedbasis,to
conservethe
soiland
water
resources
especiallyaround
towns),
to provide
industrialraw
mate-
rials,
to generate
export-income
n
foreign
currenciesby
exportingtimber,
etc. But,
forest
plantations
by
themselves will not
solve
the woodfuel
problems
of
the
peasantry.
A
strategy
hat sets out to alleviate
the
poorman'senergy crisis n the SADCC
region
should have
three prongs to it:
First,
encourage
agro-forestry, e
give in-
centives to the farmers to
grow more
of
their
own
fuel on their own
agricultural
land and in
woodlots
on the common
land aroundthe
village, using
a mix of
short-rotation
on-indigenous
nergy
trees
(for
fuel)
and long-rotation
indigenous
trees for fruit,for
fodder and for
industrial
purposes. This means
providing
echnical
and
financial
assistance
hrough agricultu-
ralextension
services,
rather han
forestry
services.
Second, while
the present prac-
tice of
cooking
on
an open
fire
also fulfills
certain
social and cultural
needs,
it
is
an
extremely
nefficientway of
using the heat
generated by
firewood;
only
a small
per-
centageof
the total
amount released dur-
ing
buming is actually
used. In
principle,
there is
great scope
for saving
firewood by
using
highly efficient
stoves which have
been
speciallydesigned
for the purpose.
This may
entail the mass
production and
mass
dissemination at
low
subsidized
prices
of
simple,
efficient wood and
char-
coal
stoves.
This is a
truly
daunting task
which
requires
considerable
mobilization
of
manpower,
material and
financial re-
sources.
Third, the
woodfuel
problem
should
not be
considered
n a
purely static
fashion, as
though
there is
no
room for
changing
he
patterns
of
energy
consump-
tion. If
the
material
andcultural
tandards
of the rural and urban
poor
are
-to be
raised,they
must
have
access, by
stages, to
modern
fuels.
Modern,
non-petroleum
based fuels, in
particular
hydro or coal
generated
electricity, or
electricity pro-
ducedby
local
producer
gas
units, will tru-
ly
revolutionize
he
peasant's life
by pro-
viding
light for
reading,
and
for
produc-
tion,
distribution nd
socio-economic ctiv-
ities at
night.
This would
be
a
great
eap
forward n
the life of the rural
poor in
addition o
preserving
medicines, vaccines
and
foodstuffs
through
refrigeration.
Large-scale
rural electrification
hould be
pursued.
Let's
bring
our
attention back to the
urban
consumersof
woodfuel
who, as
we
argued
earlier,
both create and
suffer rom
the
woodfuel
crisis. Their
crisis will
also
respond
positively o
the
second and
third
prongs of
the
strategy
outlined
above.
In
addition,
the
option of
providing
charcoal
to
them
throug
controlled
forest
planta-
tions
and
more
modern,
efficient
large-
scalemanufacturing
annot be
neglected.
Ourpresent knowledgeof the woodfuel
situation in SADCC
countries is very
sketchy. To make
informed policy and
strategy
decisions, more detailed informa-
tion
from extensive and intensive field-
work is needed. It is to
be hoped that the
SADCC countries will
embark, without
delay,
on gathering his information
as a
necessary tep towardssolvingtheir
wood-
fuel crises.
Retnncm and Notes
1. Woodfuel means firewood
fuelwood)
and char-
coal.
2. SADCC stands for the SouthernAfricanDevelop-
ment CoordinationConference
omprisingAngola,
Botswana,Lesotho, Malawi,
Mozambique,
Swazi-
land,
Tanzania,
Zambia
and Zimbabwe.
3.
The author s a consultant conomistand technical
adviser o the SADCC EnergySectorTechnical
nd
AdministrativeUnit. The views expressed
n this
articleare entirely his own, and should not be at-
tributed o the Unit he is working
n.
4. 1 GigaJoule= 1000
million
Joules
= 0.034 metric onsof coalequivalent
= 0.022 metric ons oil equivalent
5.
A Van Gelder and
0
Poulson The woodfuelsup-
plyfrom reesoutside he forests n the highlands
f
Kenya ,The Beijer
Institute,Stockholm,Sweden,
1981.
6. P O'Keefe Fuel for the People: Fuelwood n the
Third
World ,
Ambio,
Vol. 12 Number2, 1983.
7. Author'saddress:
do
Beijer Institute,Royal Swed-
ish
Academy
of
Sciences,
Box
50005, S-
10405
Stockholm,Sweden.
stimating t h o s t
o
o i s e
ollution
n
r a n c e
I~ ~
I
0~~~~~~~~
22
ab
a -
BYDAVID
PEARCE,
JEAN-PHILIPPE
ARDE
AND
JACQUES
AMBERT
One of the
many problems faced by
en-
vironmentalpolicy
makers is the
ranking
of prioritieswithin
any given environmen-
tal budget. One can wonder if we are
perhapsmost ignorant about those
pollu-
tants that may
matter most.
It is
arguable,
for example,
that the continued preoc-
cupationwith the human health effects of
sulfur dioxide
is misplaced, especially
when evidence
of that damage s compared
either to damage rom drinking
watercon-
taminants r to
the other formsof environ-
mentaldamage
rom SO2such as materials
corrosionand acid rain. There s,
however,
one source of
pollutionwhichhas received
mountingattention:noise. It has been esti-
mated that, in OECD countries,
about 15
percent
of
the
population (ie
100 million
people) are exposed
to noise levels above
65
decibels.
It has been estimated that
approximately55 percent of
the popula-
tion (400 million inhabitants)are
exposed
to a
noise level
of over 55 dB (1). Forecasts
in
several countries
show that if stringent
abatement policies are
not
implemented,
this situationwill remain he same
or even
worsen (2).
ABIO984
27
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8/19/2019 Estimating the Cost of Noise Pollution in France
3/3
Table 1.
Traffic noise exposure and depreciation of
property prices:
France
1980.
(a)
(b) (c)
(d) (e)
(f)
Noise Number
of Mean
Value of (c)
x
0.4 %
Depreciation
Level
Dwellings (1)
Excess Housing
(%) at 0.4%
of
dB
(A) dB
per Stock (3) house
price
(Leq
scale)
household (2) Francs
x
109 (e)
x
(d)
Francs
x 1
09
55-60 3 442
128 2.5
860.5
1.0
8 605
60-65 2
214 265 7.5
553.6
3.0
16 608
65-70 1 765
117 12.5
441.3 5.0
22 065
70-75
709 709
17.5 177.4 7.0
12 418
75+ 76939 22.5 19.2 9.0 1 728
Total
8 208 158
2052.0
61
424
Sources:
1
IRT (1982), p.lV.11.
This comprises 44.2% of all
dwellings.
2
Taking 55 dB (A) as
the origin and 80 dB (A) as the maximum.
3
At an
average of 250,000 1980
F.Francs per dwelling.
To assess the economic feasibility of
traffic noise abatement requires a cost-ben-
efit analysis. To date, however,
we have
had little idea about the magnitude
of the
noise problem in terms of monetized
esti-
mates of damage. This focus article reports
a new estimate for France.
HEDONIC RICETHEORY
Substantial research efforts by economists
have led to some considerable sophistica-
tion of the idea that house prices
will
em-
body a valuation of pollution damage.
The basic idea of hedonic price theory is
that the house is to be thought
of as a
bundle of characteristics, each of which
generates benefits or liabilities
to
the
occu-
pier. The price of a house is then some
composite of the prices of these
character-
istics such as proximity to the central area
of a town, amenities, number
of rooms,
availability of garage space and the exter-
nal environment within which
the house
exists. Any pollutant in that environment
would then be thought of as
a negative
characteristic, carrying
a
negative price.
Under
certain conditions,
it
should be
possible to estimate this price
and to deter-
mine how far it measures the
occupier's
willingness to pay for the avoidance
or re-
duction of pollution. Noise nuisance
would
be one such example.
The detailed theoretical
basis
of
the
hedonic price approach is
not
reviewed
here. Explicit statements are given
in Free-
man
(3) and the specific application
to traf-
fic and airport noise is discussed in Nelson
(4).
For our purposes it is sufficient to note
that the evidence, primarily
from the
USA, suggests that-for
traffic
noise-the
fall
in
the price
of a house
due
to a one
decibel rise in the level of noise
is
about
0.4
percent. That is, for each
1
dB rise
in
the
noise level, the price
of
a
house would
fall
by 0.4 percent,
all other things being
equal. The empirical problems
with
this
approach are formidable and
the hedonic
price approach
is not
without
its theoreti-
cal
critics (5).
For
the
current
exercise,
however, we are interested in seeing
whether the measure of damage
that
such
a
price implies for a nation
as a whole
appears
to
be
of
the right
order
of
mag-
nitude.
THECALCULATIONS
France was chosen because
of
the availa-
bility of a detailed
and extensive analysis
of automobile
noise which, in turn, was
related to dwellings.
In effect, it has
proved
possible to estimate
the numberof
dwellings
in France exposed
to various
levels
of noise arising from
automobile
sources(6). The
data are summarized n
Table
1.
To arriveat the grand otal for deprecia-
tion we
assumethat depreciation
s a con-
stant inearfunction
of house price so
that
the total is calculatedas:
V =
iy[Hi.
(Ni
- 55). Ph.D]
where
V is the total depreciation
f the housing
stock
due to
trafficnoise;
H. is the number
of houses
n the 'th
noise
band;
Ni
is
the upper imitof the 'th noise
band;
Ph
is an
average
house
price
across
all
noise bands;
D
is
the percentagedepreciation
due
to
trafficnoise, takenhereto be 0.4%
Table
1
shows that the
value of
V is 61.424
billion 1980 French
rancs.
Now,
the value of
V shown s the depre-
ciation
on a housing tock:
e it is a
present
valueof depreciation
and hence, following
the procedures
for hedonic
price theory,
an
approximation
f the present
value
of
the willingness o
pay
for
reducing
all
traf-
fic noise to 55 dBA.
In
fact, willingness
o
pay may be less
than the depreciation
sti-
mate unless specific
restrictions
re
placed
on
the
assumptionsabout
the demand
for
and
supply
of quiet (see
Freeman,3).
It
is more relevant
o express t as
an annual
loss. While t would be possible o extrapo-
late the number
of exposed households
into the future, for
simplicitywe calculate
the annuityvalue of
V
assuming
hat
the
same
stock of households s
exposed to the
same levels of noise
for the next ten years.
Discussionof likely trends
s to be found
n
the IRT report(7).
The annuitized
value is obtained by
di-
viding
V by
S=(I
+
r)n-I
r
By
assumptionwe have
set
n
=
20
and
30.
r is the discount rate
which
we set
at 5
percent
n realterms.
How far
this accords
with the rates of time preferenceof French
householders s difficult
o
say.
The use
of
5
percent
here is
designed
moreto reflect
a
normative discount
rate
for cost-benefit
purposes 8).
For n
=
20 and r
=
5,
we have a value of S
of 33.0659.
The resulting annuitized
value of V is
given by V/S which is 1.85
billion 1980
French
francs. For n
=
30,
S
=
66.4388
and
V/S
=
0.92 billion 1980
French francs.
It is interesting
to note that, in
France,
annual expenditures
on traffic noise abate-
ment are
0.5 billion francs per
year. which
means
that the damage cost
of noise is
about 4 times higher
with n
=
20 and
2
times higher with n = 30.
CONCLUSION
This paper
suggests that, using
plausible
results
from hedonic price
estimation as
applied to road traffic
noise, and according
to the
assumptions about
time horizons
and
discount
rates, the annual
damage
arising
from traffic noise in France is some
1
to 2 billion French
francs, or about 0.27
to
0.45 billion US
dollars
in
1980 prices
and
at
1980 exchange rates. Note
that this
is for traffic
noise only. It excludes
aircraft
noise and workplace
noise.
It also excludes
any noise impacts which are not likely to
be perceived by
house occupiers, notable
among which may be cardiovascular
dis-
eases and other
illnesses brought
on
through
the impact of
noise
on
human
stress (9). We
have deliberately
not
en-
gaged in sensitivity
analysis
to
allow
for
projections
of
noise exposure,
different
rates of
depreciation and
different origins
for the
point
at
which noise
first affects
house prices.
All these
modifications
are
possible.
The
aim has
instead
been one of
providing
a
ballpark
estimate
for one
of
the
most important pollutants-traffic
noise. The estimation
errors
in the
approach are greatly
outweighed by
the
magnitude of the 4:1 and 2:1 benefit-cost
ratio for French
traffic noise abatement,
indicating very
high social
rates
of return
for
noise
control.
References
and Notes
1.
OECD,
Noise
Abatemient
Policies
(OECD,
Paris.
1980).
2. Ibid.
3.
A
M Freeman.
The Hedonic
Pricc Approach
to
Measuring Demand
for Neighbourhood
Charac-
teristics , in D
Segal
(cd),
The Economics
of
Neighbourhood, (Academic
Press. 1979).
4.
J
Nelson,
Economic
Analysis
of
Transportatiotn
Noise
Managemant,
(Ballinger.
Cambridgc,
Mass., 1978); J
Nelson, Airports
and Property
Values:
a
Survey of
Recent Evidence ,
Journal
of
Transport Economics
and
PolicY,
14,
No. 1, Janu-
ary 1980: J Nelson, 'Highwav
Noise and
Property
Values:
A Survey of Recent Evidence ,
Journialof
Transport
Economics antid
olicv,
1982.
5.
K
G Maler,
Enironmental Economics.
A Theo-
retical Inquiry,
(Johns
Hopkins University
Press.
Baltimore.,
1974).
6. Institut
de Recherches
des Transports,
L'impact
du Bruit et de la
Pollutionz emis
par la Circulationl
Automobile,
IRT-CERNE, France,
February
1982.
7.
Ibid.
8.
D
W Pearce and
C A Nash, The
Social Appraisal
of Projects, (Macmillan,
London,
1981).
9.
op cit,
1.
10. The opinions expressed in this article are those of
the authors and
do not reflect the
views which
may
be held by their
respective institutions.
11.
The principal author,
David W Pearcc,
may be
contacted
at
the
Dept
of
Political
Economy,
Uni-
versity College
London, London University,
Lon-
don, England.
28
AMBIO
VOL. 13
NO. I
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