Economic impact assessment of farmland contamination: A policy perspective

Abstract

In this study a hedonic model is applied to the farmland market in the Campine region, an area in Belgium which is historically contaminated with particularly cadmium (Cd). Therefore, predicted soil Cd concentrations are related to farmland values in order to verify the impact on farmland pricing. In a complementary analysis of Flemish environmental policies the objective was to reveal in which way potential land buyers are informed about the presence of anomalous elements. Linear and quantile regressions indicated no significant effect from Cd concentrations on farmland prices. However, the policy analysis indicated that the policy instrument for informing land buyers on soil quality is not required to contain information about anomalous elements in case of historic soil pollution. Consequently, a lack of awareness with respect to soil contaminants among farmland buyers might be an explanatory factor for the results of the hedonic model.