Abstract
This study estimates the economic benefits of remediation in the Buffalo River, NY Area of Concern (AOC) using two distinct empirical methods. One method analyzes the effects of proximity to the AOC on prices in the residential property market. The second uses a choice survey of recent home purchasers concerning the characteristics of homes and the river. After controlling for numerous structural, community, and spatial effects, the market analysis shows that single-family residential property prices south of the river are depressed due to their proximity to the AOC by $118 million (5.4% of total market value). The impacts are greater for properties closer to the AOC. Prices to the north of the AOC do not appear to be affected. Recovery of $118 million in property value losses could produce approximately $4.7 million/year in new property tax revenues. Considering only the area for which the market study shows price discounts, the survey-based estimates reveal a willingness to pay (WTP) for full cleanup of the AOC of approximately $250 million (14% of median-based market value). The reasons for discrepancies between the results of the two methods is a matter for further research.
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