Economic Analysis of Poorly Sited Septic Systems: A Hedonic Pricing Approach

Journal of Environmental Planning and Management, 2013, 56(3):329-344.

32 Pages Posted: 7 Mar 2012 Last revised: 1 Apr 2013

See all articles by Sridhar Vedachalam

Sridhar Vedachalam

Environmental Policy Innovation Center

Fred Hitzhusen

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics

Karen Mancl

Ohio State University (OSU)

Date Written: March 6, 2012

Abstract

Proper design and quality of soil play an important role in the functioning of soil-based septic systems. Septic systems with traditional leach fields are not suitable for treatment of domestic wastewater in Ohio due to shallow soils. Along with other adverse health effects, untreated or partially treated wastewater could lead to a loss of property valuation. The assessed value of 549 randomly selected properties in Licking County, Ohio was analyzed using hedonic pricing method to isolate the effect of poor site selection on the value of the properties. Results indicate that properties sited on soils that are deemed optimal for wastewater treatment are valued 6.2% to 6.8% higher than those sited on sub-optimal soils. The results from this study would not only help the property owners in making better private decisions regarding installation of septic systems, but would also guide policy decisions that affect public health and common waters.

Keywords: septic systems, soil quality, property valuation, hedonic pricing method

JEL Classification: Q25, R10

Suggested Citation

Vedachalam, Sridhar and Hitzhusen, Fred and Mancl, Karen, Economic Analysis of Poorly Sited Septic Systems: A Hedonic Pricing Approach (March 6, 2012). Journal of Environmental Planning and Management, 2013, 56(3):329-344., Available at SSRN: https://ssrn.com/abstract=2017013

Sridhar Vedachalam (Contact Author)

Environmental Policy Innovation Center

777 6th St NW
Washington, DC 20001
United States

Fred Hitzhusen

Ohio State University (OSU) - Department of Agricultural, Environmental & Development Economics ( email )

2120 Fyffe Rd
Columbus, OH 43210-1067
United States

Karen Mancl

Ohio State University (OSU) ( email )

Blankenship Hall-2010
901 Woody Hayes Drive
Columbus, OH OH 43210
United States

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