Graduation Year

2021

Document Type

Campus Only Senior Thesis

Degree Name

Bachelor of Arts

Department

Economics

Reader 1

Nicholas Kacher

Reader 2

Roberto Pedace

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Terms of Use for work posted in Scholarship@Claremont.

Abstract

Superfund, established in 1980, is a program under the EPA which oversees the identification and cleaning of hazardous waste sites. To carry out cost-benefit analyses of the program, economists compare the EPA’s planned expenditures on cleanup to the public’s willingness to pay for reducing their risk of exposure to toxic waste. Often, economists rely on market data to estimate a figure for willingness to pay. However, the question of how accurately market data can approximate how much people implicitly value things is still the topic of much debate and research. In the case of environmental amenities (such as reduced exposure to carcinogens), transactions may be affected by low levels of information and high levels of risk. This paper looks at how the public gains information about environmental hazards by asking if property values change when a nearby hazardous waste site becomes a Superfund site. I find that Superfund designations depress property values by approximately four years of average growth (25 HPI), suggesting that designations alone convey information that affects consumer behavior.

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