Valuation of aviation externalities: a case study in Bangkok, Thailand

Aircraft noise, for the first time in Thailand, has gained public attention as a significant environmental issue since Bangkok s Suvarnabhumi Airport opened in 2006. Residential areas around the airport are expanding rapidly while local residents are protesting about the noise from the new airport which suggests a tension between economic benefits and environmental problems at the airport. This thesis sets out to obtain valuation of aviation externalities at Suvarnabhumi airport using the stated choice method. It is the first study to obtain and compare valuations from perspectives of the polluters (Thai air passengers) and the polluted (residents) at the same airport. Furthermore, this is the first study to obtain a valuation of local impacts from aircraft operations and from air passengers. It starts by investigating perceptions and awareness of the benefits and costs of aviation activities among Suvarnabhumi s residents and passengers using focus groups and questionnaires. It then employs the stated choice method to elicit willingness-to-pay (WTP) and willingness-to-accept (WTA) values of aviation externalities. The results found that the perceived environmental problems at Suvarnabhumi airport are in line with the literature mainly involving aircraft noise and its effects. This study also found that the development of the airport and surrounding area, while creating business and employment opportunities, has also created traffic and flooding problems. In terms of air pollution from aircraft, residents concerns are confined to local impacts from aircraft. Thai air passengers were found to be more concerned with engine pollution than noise. These findings were reflected in the values obtained. Two stated choice designs were used to elicit values. The first rerouted the aircraft flight path away from residents homes thus reducing aircraft noise and pollution in the area. This design also included travel time to place of work or to the shops. The rerouting attribute was not statistically significant. However, the travel time attribute reveals that residents were willing to accept 14.23 baht a month to have their travel time to work or shopping increased by 1%. The second design was used to obtain and compare values between Suvarnabhumi s residents and air passengers. In this design, attributes for aircraft noise, local air pollution and carbon emissions were included. Residents willingness to pay to reduce aircraft noise by 1% is 104.76 baht/year whereas passengers are willing to pay less, at 70.63 baht per year. Air passengers place a higher value on local air pollution than the residents. Passengers are willing to pay 97.72 baht to reduce local pollution by 1% per year, whereas residents willingness to pay is 45.36 baht. Lastly, passengers WTP to offset carbon is 473.26 baht per flight, whereas residents carbon offset coefficient is not statistically significant. The obtained values are well within the range of existing studies on aircraft noise and carbon emission valuations. Findings from this study suggest that current mitigation measures at Suvarnabhumi airport are still inadequate. There are areas where the situation is likely to get worse given the rapid growth in aviation activities and urban development at the airport. The values from this study may be used to help form the basis of fairer and more transparent compensation system alongside an operational mitigation policy to address aviation impacts. On the passenger side, the stated willingness-to-pay to reduce the impact gives an opportunity for the Thai aviation industry to promote an environmentally friendly behaviour among the travelling public.