Purpose – The purpose of this paper is to measure the impact of a proposed biomass facility on prospective property values using the contingent valuation method. Design/methodology/approach – The paper uses a web-based survey approach to measure respondents’ reactions to two scenarios: one that describes the study area currently and another that also mentions the proposed biomass facility. Findings – The paper found no statistically significant difference in the respondents’ WTP for a house based on whether they read about the baseline scenario (no mention of the biomass plant) or the proposed biomass plant. Research limitations/implications – The survey sampled males, younger people, and those with higher incomes relative to the county where the facility will be built. A few respondents, who were offered very low bids (5 percent and
15 percent of their current home value), may not have understood the question or were exhibiting strategic behavior.Originality/value – This is one of the few studies that uses contingent valuation to measure property value impacts.
Author: Clifford A. Lipscomb
Originally published in the Journal of Property Investment & Finance, Vol. 29, No. 4/5 (2011)