Free Response to Motion - District Court of Federal Claims - federal

Case 1:01-cv-00201-VJW

Document 219-7

Filed 10/05/2006

Page 1 of 3

DECLARATION Evaluation of the Expert Reports on the Effect of the Realignment of Aircraft to NAS Oceana and NALF Fentress on Surrounding Property Values
Raymond B. Palmquist
The issue being contested in the reports I have been asked to review is quite simple: Does a major increase in aircraft noise have a negative effect on the property values of houses exposed to that noise relative to the property values of houses that are not exposed to noise? The answer to that question seems obvious. Suppose there were two houses that were identical in all respects except that one was subject to extremely high levels of aircraft noise and the other was in an area free of that noise. If the houses were offered for the same price, which would you choose? Obviously, property values are going to be hurt by the noise. Professor Nelson provides evidence on the magnitude of this reduction by looking at previous empirical work.. The experts on the other side suggest the effect may not exist.

Qualifications
1. My name is Raymond B. Palmquist. I reside at 1613 Westhaven Drive, Raleigh, NC

27607. I have been employed by North Carolina State University from August 1979 to the present. I was promoted to the academic rank of Professor of Economics in 1991. I served as Department Head of the Department of Economics from 1992 to 1997. Prior to coming to North Carolina State University, I was a Research Economist with the Washington State Department of Transportation. My research and teaching expertise is in the fields of environmental economics, urban economics, and applied microeconomics. I received my Ph.D. degree from the University of Washington in 1978. I have been an Associate Editor of the Journal of Environmental

Case 1:01-cv-00201-VJW

Document 219-7

Filed 10/05/2006

Page 2 of 3

Economics and Management. I have served as Vice-president of the Association of Environmental and Resource Economics. Attached is my Curriculum Vita. 2. Much of my research has concerned measuring the benefits of environmental

improvements and the damages resulting from environmental problems. My publications have appeared in American Economic Review, Review of Economics and Statistics, Journal of Environmental Economics and Management, Land Economics, American Journal of Agricultural Economics, Journal of Urban Economics, Environmental and Resource Economics, and other journals and books. I have had grants from the Environmental Protection Agency, Sea Grant, U.S. Department of Agriculture, U.S. Forest Service, U.S. Department of Housing and Urban Development, U.S. Department of Transportation, and state agencies. I have also served as a consultant to public and private organizations. 3. I have been studying the effects of environmental conditions on property values for over

twenty-five years now. My dissertation in graduate school was on the effects of highway accessibility and noise on property values. I conducted a major study on that topic for the Washington Department of Transportation and the Federal Highway Administration. Several of my publications concern noise and property values. I have also conducted hedonic studies on many other environmental problems including air quality. I also have widely-cited publications on real estate price indexes. My survey of hedonic techniques, "Hedonic Methods," in Braden, John B., and Charles D. Kolstad, eds., Measuring the Demand for Environmental Quality, North Holland, 1991, 77-120, is widely cited. I was invited to write "Property Value Models," for the prestigious North Holland Handbook series (Karl-Göran Mäler and Jefferey Vincent, eds., Handbook of Environmental Economics, Elsevier). I (in collaboration with V. Kerry Smith) have recently completed "The Use of Hedonic Property Value Techniques for Policy and

2

Case 1:01-cv-00201-VJW

Document 219-7

Filed 10/05/2006

Page 3 of 3

Litigation," for the International Yearbook of Environmental and Resource Economics, edited by Tom Tietenberg and Henk Folmer for Edward Elgar. 4. I have used documents and exhibits submitted in support of Carole and Robert

Testwuide, et al. I have used exhibits submitted in support of the Defendant. I have reviewed academic and government studies on aircraft noise. My comments emphasize the reports of Jon Nelson, David Dale-Johnson, and David Gillen. I have not met any of these three individuals. I was retained on March 22, 2002 by Quinn, Gordan and Wolf, LLP.

Expert Report of Jon P. Nelson
5. Professor Nelson has provided a careful report that applies what is currently known about

the effects aircraft noise on surrounding property values. The quality of the report was to be expected since he has been the leading researcher on this topic for many years. His conclusions are based on research that has been done throughout the United States and Canada. Transferring Empirical Results 6. The use of empirical results derived in different locations to infer the likely effects in the

area under consideration is common in environmental economics. The concept is called Benefits Transfer. There have been numerous evaluations of validity of benefits transfer. It is widely accepted in environmental policy design. However, we should evaluate how reliable one would expect it to be in the current instance. 7. Microeconomics is concerned with how individual consumers and firms make their

decisions and how they interact in markets. If an economic study in one location reveals how individuals make decisions, one would be fairly confident that the information could be transferred and applied in other locations. This is because consumers and firms are similar

3