This paper is partly based on Baarsma (2000) and Van Praag and Baarsma (2001 , revised 2004). The work results from a study for the Dutch government. We are grateful to Prof. J. G. de Wit and the staff of the Directorate General of Civil Aviation of the Dutch Ministry of Transport (RLD for short) for giving us valuable comments. We thank Intomart, Hilversum (one of the leading polling agencies in the Netherlands) for their support in the data collection, Ingrid Overtoom, Marie-Louise Kok, and J. Peter Hop for their assiduous support in analyzing the data. Finally, this text also benefits from stimulating discussions with David De Meza.
In the previous chapter we considered climate effects. The approach developed there can also be used for the evaluation of other external effects. In this chapter we shall attempt to estimate the monetary compensation needed to neutralize aircraft noise for households living in the neighborhood of Amsterdam Airport (Schiphol). We start with a description of the setting. In Section 11.2 we consider the literature; in Section 11.3 we describe our data; in Section 11.4 we describe the model and its estimates; in Section 11.5 we consider the resulting compensation schedule; in Section 11.6 we conclude.
Many city dwellers are painfully aware of a nearby airport. They suffer from aircraft noise. Amsterdam Airport (Schiphol) is no exception. The air traffic has heavily expanded since the airport was opened in 1926. It is now one of the major hub airports in Europe and the only large-scale airport in the Netherlands. The aircraft noise around Schiphol is closely monitored by zip code. Noise is calculated in Kosten-units (Ku). This unit is called after the late Dutch professor Kosten, who chaired a government commission in the late sixties and early seventies. The task of the Kosten Commission (1967) was to derive an aircraft-noise measurement method. They developed an annual-noise-burden formula, where noise burden depends on the number of flights, differentiated according to the time of day or night and the number of decibels the flight produces. This formula of measurement is still in use, although in the near future the Dutch will switch to the international proposal for themeasure. There is a strong empirical correlation between the results of both definitions of noise. That is, a zip code which scores high in Kosten-units, also scores