The UK's first comprehensive look at the local nuisance effects of living close to a landfill site has been published by the UK Department of Environment, Food and Rural Affairs (DEFRA).

The study (by Cambridge Econometrics, EFTEC & WRc) looked at over half a million sales of houses situated near UK landfill sites and found that those properties sited within half a mile of a landfill site suffer statistically significant disadvantages. The value of houses situated less than a quarter of a mile away from a landfill site were an average of £5,500 lower than the value of a similar house not situated near a landfill site. For those houses over a quarter of mile from a site but under half a mile, this value was an average of £1,600.

Transferring these figures into a national context the estimated total mean reduction in house prices within half a mile of a landfill site amounts to £2.483 million. The average reduction in houses prices near each landfill site equated to an average of £400,000 or £1.52 to £2.18 per tonne of landfill waste.

Clearly the GB average encompasses a range of specifically regional effects. The most marked effects are for Scotland, with those in closest proximity to a landfill site (less then a quarter of a mile) seeing a change of -40%. It is worth noting that Scotland has had the most stable of UK housing markets. It may be that in this specific market the effect of landfill can be more readily observed in its effect on house values, or that overlap with other drivers such as income are stronger, or that disutility of landfill is perceived to be higher.

Environment Minister Michael Meacher said 'This study further highlights one of the pressing problems for modern society - how we get rid of our rubbish. The noise, the litter, the smells, the vermin and the visual scarring in neighbourhoods near landfill sites should be borne in mind by anyone watching their bin liners being thrown into the back of a dust cart. I'm sure it is an out of sight out of mind issue for many. But for people living close to these sites it is a pressing issue; as it is for the Government.

That is why we are keen to encourage people to recycle or re-use rubbish before throwing it away for it to ultimately end up in a landfill site.'

The study uses landfill data made available by the Environment Agency and the Scottish Environmental Protection Agency together with individual house price and ward-based socioeconomic data drawn from Cambridge Econometrics' AHPD database. The study covers Great Britain, except for small parts of the North West and East Midlands where data are not currently available. Data for Northern Ireland are not yet available on a comparable UK basis.

The combined database identifies a core data set of 11,300 GB landfill sites (some 6,100 licensed as operational in 1993/94) and the study has associated these sites with 592,000 housing transactions from 1991-2000 inclusive.

The initial purpose of the study was to inform future work on the landfill tax. The landfill tax was introduced in October 1996, with a standard rate of £7 per tonne for biodegradable waste, and a lower rate of £2 per tonne for 'inactive' wastes. The tax rates were set at levels designed to be approximately equal to the economic value of environmental damage caused by landfilling one tonne of waste; i.e. the environmental externality per tonne landfilled.

Two groups of environmental externalities were reflected in the tax for biodegradable waste: the disamenity effects (due to noise, dust, visual intrusion, odour, etc) of landfill sites and the pollution effects of landfilling waste. The disamenity effects were attributed a nominal value of £2 per tonne of waste landfilled, based on research in the United States.

Taking house prices at their 1995 values and updating for consumer price inflation, the study found that a nominal measure of fixed disamenity cost<