The Impact of Mining and Smelting Activities on Property Values: A Study of Mount Isa City, Queensland, Australia

19 Pages Posted: 24 Jan 2013

See all articles by Prasad Neelawala

Prasad Neelawala

affiliation not provided to SSRN

Clevo Wilson

Queensland University of Technology

Wasantha Athukorala

University of Peradeniya - Department of Economics and Statistics

Date Written: January 2013

Abstract

Much publicity has been given to the problem of high levels of environmental contaminants, most notably high blood lead concentration levels among children in the city of Mount Isa because of mining and smelting activities. The health impacts from mining‐related pollutants are now well documented. This includes published research being discussed in an editorial of the Medical Journal of Australia (see Munksgaard et al. 2010). On the other hand, negative impacts on property prices, although mentioned, have not been examined to date. This study rectifies this research gap. This study uses a hedonic property price approach to examine the impact of mining‐ and smelting‐related pollution on nearby property prices. The hypothesis is that those properties closer to the lead and copper smelters have lower property (house) prices than those farther away. The results of the study show that the marginal willingness to pay to be farther from the pollution source is AUS $13 947 per kilometre within the 4 km radius selected. The study has several policy implications, which are discussed briefly. We used ordinary least squares, geographically weighted regression, spatial error and spatial autoregressive or spatial lag models for this analysis.

Keywords: hedonic price model, mining‐ and smelting‐related pollution, Mount Isa, property (house) prices, spatial analysis

Suggested Citation

Neelawala, Prasad and Wilson, Clevo and Athukorala, Wasantha, The Impact of Mining and Smelting Activities on Property Values: A Study of Mount Isa City, Queensland, Australia (January 2013). Australian Journal of Agricultural and Resource Economics, Vol. 57, Issue 1, pp. 60-78, 2013. Available at SSRN: https://ssrn.com/abstract=2206091 or http://dx.doi.org/10.1111/j.1467-8489.2012.00604.x

Prasad Neelawala (Contact Author)

affiliation not provided to SSRN ( email )

Clevo Wilson

Queensland University of Technology ( email )

GPO Box 2434
2 George Street
Brisbane, Queensland 4001
Australia

Wasantha Athukorala

University of Peradeniya - Department of Economics and Statistics

Peradeniya, 20400
Sri Lanka

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