Industrial location and residential disamenity: a case study of the chemical industry in Castleford, England

Despite their location near residential populations, limited disamenity property rights have been granted to chemical firms in accordance with Government legislation in most developed countries. These include rights to produce limited harmless odours, noise and visual intrusion, and, as long as restrictions to the property rights are not breached, no compensation will be payable. With these considerations in mind it is essential that the magnitude of these residential amenities are evaluated before granting the relevant property rights for the local environment. This study presents a relatively novel approach to monetary estimation of such disamenity using local knowledge of the housing market. Monetary estimates are provided for the cost of residential disamenities received and the relative importance of the different types of externality associated with permitting chemical works to be located near to residential areas. The results suggest that although such property-right decisions can be efficient in economic terms, local residents may still have to shoulder sizeable wealth reductions. Even for a long-time established chemical industry, the results suggest the main causes of disamenity for local residents to be from their perceived health risk rather than visual or distance amenity.1998 Academic Press