A Study on the Estimating Economic Value for Undergroundization of Waste Treatment Facility using the Hedonic Pricing Model

Abstract

Waste is the by-product of human activity. As long as mankind exists, waste generation is an indispensable factor. In order to stable disposal of waste, waste treatment facilities should be constructed. However, it is difficult to construct the facilities because they are recognized as NIMBY (‘not in my backyard’) facilities due to concerns such as odors, noise, and falling housing prices. Recently, a number of undergroundization of waste treatment facilities have been constructed to reduce negative impacts, but it is rare to research on economic values that can support the feasibility of the project. Therefore, this study aims to the estimating economic value for the undergrounding project (Hanam-si) using the hedonic pricing model. The analysis was conducted on apartment houses located within 3 km of waste treatment facilities, and the variables were determined by actual transaction prices, housing structure variables (size, floor, room, BCR, FAR etc) and external variables (commencement and completion date of subway, complex shopping mall and waste treatment facility) from 2011 to 2017. As a result of the analysis, the construction of undergroundization project is resulted in a 1.953% increase, and completion of the project is 1.374~1.654% increase in housing prices. The influence of housing structure variables is greater than the external variables. In addition, commencement variables are more influential than completion variable in undergroundization project.