Estimating the economic benefits of cleaning up Superfund sites: The case of Woburn, Massachusetts

Superfund was established in 1980 to deal with closed and abandoned hazardo us waste sites. Given the large amounts of money being spent on cleanups of Superfund sites, one might hope that the money is being spent in a cost-ef fective manner, but there is little evidence that the estimated benefits fr om cleanup affect the cleanup decision. We apply the hedonic method to hous e prices to estimate the individual willingness to pay (WTP) to clean up a Superfund site. We then show how the individual WTP can be used to calculat e the total benefits from cleaning up the site so that a cost-benefit analy sis of Superfund cleanup can be undertaken. We apply our technique to the t wo Superfund sites in Woburn, Massachusetts. We find that the benefits from cleaning up these sites are in the range of $72 million to $122 million (1 992 dollars). It is likely that these benefits are greater than the present value of the estimated costs of cleaning up these sites. Thus it appears t hat the cleanup of the Woburn Superfund sites results in positive net benef its to society.