The Effect on House Prices of the Remediation of Contaminated Areas A study of the Falu mine in Sweden

Abstract

Our thesis aims to measure how a local population values the effect of remediating a contaminated site to strengthen the argument for remediation. We estimate the effect of remediation processes of the Falu mine in Sweden on sales prices of surrounding houses and estimate the willingness to pay of the local population for the cleanup. We find that after remediation, residential property prices in the remediated area increased by 6.9 percent more than prices of houses located outside the remediated area. We estimate that the aggregated profit for the increase in price on the total land area owned by homeowners in the remediated area is SEK 100,725,965 SEK, which exceeds the governmental costs of remediation of the Falu mine. H a