Neighborhood Effects and Compensation for Property Value Diminution

14 Pages Posted: 2 Dec 2002

See all articles by Jill J. McCluskey

Jill J. McCluskey

Washington State University

Ray G. Huffaker

Washington State University - School of Economic Sciences

Gordon C. Rausser

University of California, Berkeley - Department of Agricultural and Resource Economics

Abstract

This paper analyzes the legal issues surrounding defendants' liability for property value diminution caused by stigma from environmental contamination. The courts, law review articles, and public policy analyses are in disagreement over how to handle stigma damages. This paper argues that a reasonable risk of contamination is not required for a nuisance claim if community effects, which were caused by the contamination, are present. The authors then turn to issues regarding the level of damages and propose a methodology for measuring compensation that is based on a guaranteed sales price. This methodology is applied to the RSR smelter in Dallas, Texas.

Suggested Citation

McCluskey, Jill and Huffaker, Ray G. and Rausser, Gordon C., Neighborhood Effects and Compensation for Property Value Diminution. Available at SSRN: https://ssrn.com/abstract=318647

Jill McCluskey (Contact Author)

Washington State University ( email )

School of Economic Sciences
Pullman, WA 99164
509-335-2835 (Phone)

Ray G. Huffaker

Washington State University - School of Economic Sciences ( email )

Hulbert 211G
Pullman, WA 99164
United States
509-335-3048 (Phone)

Gordon C. Rausser

University of California, Berkeley - Department of Agricultural and Resource Economics ( email )

207 Giannini Hall no. 3310
Berkeley, CA 94720
United States
510-642-6591 (Phone)
510-643-0287 (Fax)

HOME PAGE: http://are.berkeley.edu/~rausser/

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