HAZARDOUS-WASTE SITES AND PROPERTY-VALUES IN THE STATE OF NEW-JERSEY

The polluter pays principal is justified as a deterrent to future pollution. However, the US experience suggests that it has considerably reduced the clean up rate of existing hazardous waste sites. Coase's theorem is used as basis to propose that a partnership between the polluters and property owners near these sites will not only ease financial burden but will also speed up the pace of cleanup. A hedonic price model is used to empirically estimate the impact of siting of hazardous waste sites on property values and determine the economic feasibility of the proposed partnership. The empirical estimates are based on municipality level data from the state of New Jersey. The benefits from speedy clean up of hazardous waste sites to New Jersey property owners are observed to exceed the cleanup cost of these sites.