paper ID: 195 /p.

Noise valuation practices in road project appraisal

in Europe

J. Lambert & D. Aboki

INRETS-LTE, 25 avenue F. Mitterrand, 69 675 Bron, France, lambert@inrets.fr

Abstract

Many European countries developed and implemented tools for the socio-economic assessment of road projects.
Among the environmental assessment criteria, noise constitutes a major aspect. Noise values are now usually used in
several European countries, in particular within the framework of cost-benefit of road projects. This paper presents
an overview of the European practices as regards valuation of noise and use of monetary values in the assessment of
road projects. This paper mainly focuses on the scientific basis of the noise values used in practice. A comparison of
the practices by the Road administrations in France, Sweden, Germany and Norway is proposed. Finally, the
harmonization of these practices at the European level is discussed.

1. INTRODUCTION
Taking into account the environmental impacts of transport projects or policies in the decisions
is recent. It raises the question of the integration of the environmental externalities, and in
particular that of the noise, in cost-benefit analysis. From a theoretical point of view, noise
values can be used as a measure to represent welfare changes (loss or gain) from a reduction or
an increase of noise. From a practical point of view, noise values can be used for numerous types
of economic decisions related to noise issues: road scheme appraisal, compensation, pricing of
road infrastructure, road traffic noise abatement projects or policy.

2. TECHNIQUES FOR NOISE VALUATION

Monetary value of noise derives often from people’s willingness to pay (WTP). Sometimes WTP
reflects impacts to the extent that individuals are aware of them and sometimes the amount of
money that society or individuals will agree to pay to reduce or prevent transportation noise.
Various techniques are available for valuing noise [Table 1], but the hedonic pricing and the
contingent valuation methods are at present the most commonly used [1].

Table 1: Valuation techniques of noise

Group concerned Valuation technique Approach

Explicit Individuals Contingent valuation Psychometric
Implicit Individuals Hedonic pricing Econometric
Preferences
Expenses of households
Implicit Society Court decisions (results of) Tutelary
Avoidance costs
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3. PRACTICES OF ROAD ADMINISTRATIONS

3.1. France
The value of noise currently used by the French Road Directorate derives from the circular of the
Ministry of Transport from October 1995 with Euro 147/annoyed person/year. This value is
based on a rough calculation using a “top-down” approach [2]. On a practical way noise value is
used as follows (Table 2).

Table 2: Valuation of noise in road scheme appraisal in France

State 1 - without project State 2 - with project
Façade noise level Ld1 Ld2

Conditions of
Ld > 60 dB(A) and | Ld2 - Ld1 |> 2 dB(A)
taking into account

Day 6h - 22 h

Valuation of the Bd1 = 0,05 * 147 * (Ld1 - 60) Bd2 = 0,05 * 147 * (Ld2 - 60)
daytime noise
Bd21 = Bd2 - Bd1
Façade noise level Ln1 Ln2

Conditions of Ln > 55 dB(A) and | Ln2 - Ln1 |> 2 dB(A)

taking into account

Night 22h- 6 h
Bn1 = 0,05 *147 * (Ln1 - 55) Bn2 = 0,05 * 147 * (Ln2 - 55)
Valuation of the
night-time noise
Bn21 = Bn2 - Bn1

Per capita annual cost = Bd21 + Bn21 (in Euro)

Proposals have recently been made by the National Planning Commission [3] to revise the
valuation calculation. Noise valuation would be no longer based on the number of people
annoyed but on the depreciation of the annual rental value of the exposed dwellings. For noise
levels exceeding 55 dB(A), an increase of 1 dB(A) implies a loss of the value of the real estate
going from 0.4 % to 1.1 %. Beyond 70 dB(A), the long-term effects on health (not included by
the housing market) are taken into account through an extra cost (Table 3).

Table 3: New noise valuation approach in France

Daytime LAeq at the façade 55 – 60 60 – 65 65 – 70 70 – 75 Beyond 75

Depreciation index / dB(A) 0.4 % 0.8 % 0.9 % 1.1 % 1.1 %

Extra costs for long term health effects + 30 % + 30 %

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3.2. Sweden
1981 was the year of the introduction of the cost-benefit analysis as a assessment method of road
investments. Studies on the value of noise were undertaken previously according to the hedonic
approach. A linear relation between the noise level and the cost was then used, which makes it
possible to set a value of noise at SEK 1 700/pers./year (SEK = Swedish crowns). In 1994, the
Swedish Institute for Transport Communication Analysis (SITCA or SIKA) was created by the
Government for the determination of noise, air pollution and space consumption money values.
A working group, ASEK, was charged with the examination of scientific work for the updating
of the values. SIKA had proposed first calculation of the value of noise: VN = 130*(Leq–50),
Leq being the outside noise level (free field) over 24 h. This linear model was rejected firmly by
the Swedish National Road Administration. The money values of noise were revalued in 1999 by
the ASEK group [4]. Contrary to other countries, noise annoyance is evaluated in monetary
terms inside and outside houses. This results for example in giving a cost of noise at 55 dB(A) to
690 SEK/person/year i.e. € 79 of which 47 € correspond to the annoyance inside the dwellings
and € 32 to the annoyance outside the dwellings. At 75 dB(A), the value of noise is 13 890
SEK/person/year, i.e. € 1 590.

3.3. United Kingdom

Between the initial situation and the road project, one considers the number of houses which will
undergo a modification of the noise levels equal to or higher than 3 dB(A). Results are deferred
in the AST (appraisal summary table) and one specifies the number of dwellings undergoing a
higher noise level because of the project. Furthermore, if there are no noise official values1 in the
United Kingdom, there are procedures aimed at owners' compensation when a new infrastructure
leads to the depreciation of the housing due to the noise, the vibrations, the odors, the fumes and
or the street lighting. It is the Land Compensation Act of 1973 which institutionalised this
procedure.

3.4. Germany
The evaluation of road projects, formalized in the BVWP (Bundesverkehrswegeplan), is
described very precisely in the "Economy Part of the General Directives of planning and
construction of the roads " RAS-W. The plan of the evaluation relies on monetary valuations of
costs and benefits of the project. The RAS-W had several versions in 1971, 1986 and 1997. From
the beginning, environment was included with noise and pollution being taken into account.

Until very recently, in all infrastructure projects, noise was valued by protection expenditures. In
the case of road projects, one should consider expenditure for the equipment of the dwellings in
double glazing. The cost of the noise fixed by the BVWP 92 (1989 prices) was DM
72.50/pers/year or 36 €/pers/year [5].

From the implementation of the BVWP’03, the evaluation method will address willingness to
pay of exposed persons for urban projects. In concrete terms, noise annoyance is measured
during the day and during the night, when the difference in noise level between the initial
situation and the project is higher than 2 dB(A). In open country, the harmful effects of noise are
no longer neglected. For noise level differences higher than 2 dB(A) between the initial situation
and the project, costs are internalised through protection expenditures carried out by the
community to reduce noise levels (such as noise barrier or earth berms etc).

1
However, HETA (Highways, Economics and Traffic Appraisal - a part of DETR) recommends the use of £21.24
per household, for a one decibel noise improvement.
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3.5. Norway
The Norwegian Public Road Administration (NPRA) recommends the cost-benefit analysis as a
assessment method for road projects. It is compulsory for major infrastructures. Only noise and
pollution are subject to a monetary valuation. The other impacts are considered qualitatively. The
evaluation of the projects is made via a comparison with the “nothing” situation i.e. with the
existing network. The method used both for noise and air pollution derives from a contingent
valuation approach of the willingness to pay. One should consider the cost to reduce 50 % of the
harmful effects. (Table 4)

Table 4: Value of noise used in Norway by NPRA [6]

Costs in NOK/highly annoyed person / year Costs in € 95/year

14,000 1,750

Noise values derived from two studies carried out by Sælensminde & Hammer (1994) and
Sælensminde (1999). They use a mixed approach: contingent evaluation and conjoint analysis in
Oslo and the region of Akershus.

4. COMPARISON
The studies from which practical values of noise derive are based on sometimes similar methods.
Nevertheless, one can observe a large range of values [Table 5]. Several reasons explain these
differences.

Table 5: Summary of the practices of valuation of noise

France Germany U.K Sweden

Method Comparison of studies Avoidance costs Quantitative Hedonic pricing
LAeq façade LAeq free field L 10 dB(A)
Noise index LAeq free field

Day: 6h - 22 h Day: 6h – 22 h Night and day: 6h-

Period 24 h
Night: 22 h – 6h Night: 22 h – 6h 0h

55 dB(A) night 49 dB(A) night

Regulatory threshold 68 dB(A) 50 dB(A)
60 dB(A) day 59 dB(A) day
Value Euro 147/annoyed Depend of noise
DM85/pers/year No value
person/year levels
Reference year 1994 1997 1999
€ value 2000 at 65
73.5 46 - 295
dB(A)

Excepted UK, all these countries use the same noise impact index: the equivalent noise level
(LAeq). The threshold noise level depends on national regulations. Daytime threshold noise level
is varying between 53 and 62 dB(A) at the façade. The evaluation covers in general the
individuals' annoyance felt inside the dwellings while the outside annoyance is seldom taken into
account. The other areas (office, school) are not considered. The Swedish Road Administration
 paper ID: 195 /p.5

is the only administration which values annoyance felt outside which accounts for 40 % of the
total cost of noise.

Differences are very important, with a Swedish value 4 times higher than the French value and 6
times more than the German value. Differences are not only due to the heterogeneity of the
methods but also to local conditions. Another explanation of the Swedish value could be
connected to the valuation of the annoyance outside and not only the annoyance felt inside the
dwellings.

5. DISCUSSION AND CONCLUSIONS

Within the EU, many road administrations make use of monetary values of noise. These values
help decision makers, particularly in road scheme appraisal when the assessment practices are
based on cost-benefit analysis. However, the analysis of the practices in noise valuation clearly
shows a large range of monetary values which reflect not only the diversity of valuation
techniques used but also the local conditions and the compromise between the values provided
by the experts and the values finally used by the decision-makers.

Therefore, a major political issue is to know whether an harmonisation of the noise valuation
practices is necessary at the European level, particularly in the frame of the assessment of
Transeuropean transport network projects. This harmonisation would need first an harmonisation
of the valuation methods used in practice. Hedonic pricing as well as contingent valuation seem
to be the most appropriate methods. However more research is needed at the European level to
obtain reliable noise values as well as values integrating long term health impacts of changes in
noise exposure. Secondly, this harmonisation needs a public debate on these methods and these
values for a better acceptability as the road administrations and the expert groups are not the only
“actors” involved in the “assessment-consultation-decision” process. The harmonisation process
could involve not only the European Parliament but also the national and local decision-makers
as well as stakeholders and the general public.

REFERENCES
1. J. Lambert, J.M. Kail and E. Quinet, “Transportation noise annoyance: an economic issue”,
in Proceedings of Noise Effects'98, Sydney, Australia, 22-26 November 1998.

2. J. Lambert, “Using monetary values of noise for transport policy decisions: current practice
and future developments in France”, in Proceedings of Internoise 2000, Nice, 27-30
August 2000.

3. CGP, “Transports : choix des investissements et coût des nuisances”, La Documentation

Française, Paris, 2001.

4. SIKA, “Summary of ASEK estimates”, SIKA report. Stockholm, 2000.

5. Planco Consulting, “Gesamtwirtschaftliche Bewertung von Verkehrswegeinvestitionen”,

Essen, Juni 1993.

6. NPRA, “Impact assessment of road projects: methodology used by the Norwegian public
roads administration”. Oslo, 2001.