Port expansion and negative externalities: a willingness to accept approach

Abstract

Port expansion has been seen as the origin of negative externalities, affecting local residents’ well-being and contributing to the poor public image of ports. In this study, the contingent valuation method is used to estimate the costs borne by local residents as a consequence of the negative externalities derived from the growth of the Port of Valencia (Spain) in the last 30 years. As transport project appraisal has become more complex, this technique complements existing methodologies in this field, such as the social cost benefit analysis and the multicriteria analysis. Given the perceived property rights of families that have been living close to the port for a long time, a willingness to accept (WTA) framework was used. The econometric analysis undertaken reveals that among the different externalities derived from this growth, the only concern that truly affects individuals’ WTA is the reclamation of land from the sea during the port’s expansion. Finally, the results obtained show that the present value of the costs potentially borne by local residents ranges from a minimum value of €64.4 million to a maximum value of €107.4 million, depending of the aggregation criterion chosen.