Hedonic Valuation of Odor Nuisance Using Field Measurements: A Case Study of an Animal Waste Processing Facility in Flanders

In this paper we estimate the external cost caused by odor from an animal waste processing facility in Flanders, using new odor measures based on field measurements. We compare four ways of incorporating odor nuisance: distance to the source, distance zones, continuous odor measures, and odor zones. The odor zones approach seems best suited to estimate the external costs. We test these specifications for some 1,400 observations of house sales transaction between 2004 and 2008. Results show that houses subject to moderate and severe odor nuisance sell at a discount of 5% and 12%, respectively, compared to houses without nuisance. (JEL Q24, R52)