Transaction costs of ineffective legal intervention restricting land ownership in the vicinity of airports: the example of the Polish compensation scheme in the context of environmental regulations
PDF

Keywords

legal intervention
transaction costs
aircraft noise

How to Cite

Forys, Iwona, Michał Głuszak, Magdalena Habdas, and Jan Konowalczuk. 2024. “Transaction Costs of Ineffective Legal Intervention Restricting Land Ownership in the Vicinity of Airports: The Example of the Polish Compensation Scheme in the Context of Environmental Regulations”. Economics and Environment 88 (1): 626. https://doi.org/10.34659/eis.2024.88.1.626.

Abstract

The goal of the paper is to assess the social implications of an ineffective legal intervention, which consists of introducing ownership restrictions concerning residential real estate located in the vicinity of airports. The paper evaluates Polish law in the context of the legislator's environmental aims and compares current regulations in Poland with solutions adopted in English law and American jurisdictions. The social and economic impact of ineffective legal intervention is calculated for the KTW airport case study with the use of information about the structure and value of filed and awarded claims for damages. With the use of this data, in the empirical part of the paper, we evaluate the factual transaction costs of public intervention for that airport, as well as ones which would occur if, instead of the Polish model, the American and the English models of compensation were applied. This allows us to explain the socio-economic consequences of adopting a given solution as well as to assess whether it fulfils desirable objectives. It also provides an opportunity to assess the models in the context of devising legally and economically justified compensation for landowners near airports affected by aircraft noise. The paper narrows the gap in the legal and economic knowledge related to the types and implications of ownership restrictions introduced in the vicinity of airports.

PDF

References

Act from 9 August 1972. Land Charges Act. https://www.legislation.gov.uk/ukpga/1972/61

Act from 4 September 1979. Aviation Safety and Noise Abatement Act. H.R. 3547. https://www.congress.gov/bill/96th-congress/house-bill/3547

Act from 27 May 1982. Civil Aviation Act. https://www.legislation.gov.uk/ukpga/1982/16

Act from 27 April 2001. Protection of Environment Act. Journal of Laws No. 62, item 627. https://isap.sejm.gov.pl/isap.nsf/DocDetails.xsp?id=wdu20010620627 (in Polish).

Allen, D. W. (1991). What Are Transaction Costs? Research in Law and Economics, 14(1991), 1-18.

Basu, K. (2018). The Republic of Beliefs. A new approach to the law and economics. Princeton: Princeton University Press.

Batog, J., Foryś, I., Gaca, R., Gluszak, M., & Konowalczuk, J. (2019). Investigating the Impact of Aircraft noise and Land Use Restrictions on House Prices: Evidence from Selected Regional Airports in Poland. Sustainability, 11(2), 412. https://doi.org/10.3390/su11020412

Baxter, W. F., & Lillian, R. A. (1972). Legal Aspects of Aircraft noise. The Journal of Law and Economics, 15(1), 1-113. https://doi.org/10.1086/466728.

Bełej, M., Cellmer, R., Foryś, I., & Głuszak, M. (2023). Airports in the urban landscape: externalities, stigmatization and housing market. Land Use Policy, 126(C). https://doi.org/10.1016/j.landusepol.2023.106540.

Bell, R. (2016). Real Estate Damages. Chicago: The Appraisal Institute. https://doi.org/10.1080/10406026.2021.1923926

Bennet, R. L. (1982). Aircraft noise Litigation: Case Law Review. Journal of Air Law and Commerce, 47(3/4), 449-494.

Berger, M. M. (2015). Strong and Informed Advocacy Can Shape The Law: A Personal Journey. Property Right Conference Journal, 4, 1-21.

Berger, M. M. (2017). The Joy of Takings. Washington University Journal of Law and Policy, 53, 189-200.

Boons, F., van Burren, A., & Teisman, G. (2010). Governance of Sustainability at Airports: Moving Beyond the Debate Between Growth and Noise. Natural Resources Forum, 34, 303-313. https://doi.org/10.1111/j.1477-8947.2010.01314.x

Butcher, L. (2017). Aviation Noise. https://commonslibrary.parliament.uk/research-briefings/sn00261/

Coase, R. H. (2013a). The Problem of Social Cost. Journal of Law & Economics, 56(4), 837-878. https://doi.org/10.1007/978-3-031-41508-1_21

Coase, R. H. (2013b). The Firm, the Market and the Law. Reprint edition. Chicago and London: University Chicago Press.

Cohen, J. P., & Coughlin, C. C. (2009). Changing Noise Levels and Housing Prices Near the Atlanta Airport. Growth and Change, 40(2), 287-313. https://doi.org/10.1111/j.1468-2257.2009.00476.x

Cooter, R., & Thomas, U. (2012). Law and Economics. Boston: Addison-Wesley.

Elliott, C., & Quinn, F. (2009). English Legal System. Harlow England: Pearson Longman.

FAA. (2015). FAA Issues Fact Sheet on State and Local UAS Laws. https://www.faa.gov/newsroom/faa-issues-fact-sheet-state-and-local-uas-laws

FAA. (2019). Advisory Circular Draft AC 150/5000-9B. Guidelines for Sound Insulation of Structures Exposed to Aircraft Noise. https://www.faa.gov/documentLibrary/media/Advisory_Circular/draft-150-5000-9B-public-review.pdf

Falzone, K. L. (1999). Aircraft noise Pollution: Is There a Solution in Sight. Environmental Affairs, 26(4), 769-807.

Foryś, I., Habdas, M., & Konowalczuk, J. (2019). Fair and effective compensation of loss in restricted use areas surrounding airports in Poland. Economics and Environment, 70(3), 87-113. https://doi.org/ 10.34659/2019/3/37.

Goulbourne, S. (2002). Aircraft noise and the Right to Family Life: A legitimate Application of Article 8 of the European Convention? Liverpool Law Review, 24, 227-236. https://doi.org/10.1023/A:1023985530190.

Gruszecki, K. (2019). Prawo ochrony środowiska. Komentarz. Warszawa: Wolters Kluwer. (in Polish).

Habdas, M. (2020). Polish dilemmas in compensating landowners in the vicinity of airports – black letter law vs. law in action. Studia Prawnicze KUL, 84(4), 27-61. https://doi.org/https://doi.org/10.31743/sp.8634

Habdas, M. (2024). Compensating Landowners in the Vicinity of Airports. A Comparative Study of the Neighbour Conflict. London-New York: Routledge.

Habdas, M., & Konowalczuk, J. (2018). Cele i warunki skutecznej interwencji państwa w obszarach ograniczonego użytkowania portów lotniczych. World of Real Estate Journal, 105(3), 5-16. (in Polish). https://doi.org/10.14659/WOREJ.2018.105.001.

Habdas, M., Konowalczuk, J., & Sluysmans, J. (2020). Compensating Owners of Residential Properties Located Near Airports - a Comparative Perspective on the Netherlands and Poland. World of Real Estate Journal, 4(114), 12-13. http://dx.doi.org/10.14659/WOREJ.2020.114.01.

Jendrośka, J., & Bar, M. (2005). Prawo ochrony środowiska. Podręcznik. Wrocław: Centrum Prawa Ekologicznego. (in Polish).

Justia. (1946). United States v. Causby 328 U.S. 256 (1946). https://supreme.justia.com/cases/federal/us/328/256

Justia. (1962). Griggs v. Allegheny County 369 U.S. 84 (1962). https://supreme.justia.com/cases/federal/us/369/84

Kamińska, K. (2022). Dochodzenie roszczeń odszkodowawczych w związku z interwencją państwa w obszarach ograniczonego użytkowania portów lotniczych – glosa do wyroku Sądu Najwyższego z 20.04.2021 r., II CSKP 5/21. Glosa, 3, 42-56. (in Polish).

Klat-Górska, E., & Ostapski, A. (2021). Odszkodowanie z tytułu ograniczenia korzystania z nieruchomości położonej w obszarze ograniczonego użytkowania - glosa do wyroku Sądu Najwyższego z 11.03.2020 r., I CSK 688/181. Przegląd Sądowy, 9, 92-106. (in Polish).

Konowalczuk, J. (Ed.). (2020). Report on empirical study of the real estate market in the area influenced by the operations of the International Airport in Katowice-Pyrzowice. Cracow: Cracow University of Economics. (in Polish). https://doi.org/10.3390/su11020412.

Konowalczuk, J., Habdas, M., Foryś, I., & Drobiec, Ł. (2021). Wartość nieruchomości w sąsiedztwie lotnisk - metodyka szacowania szkód i ustalania odszkodowań. Warszawa: Wydawnictwo C.H. Beck. (in Polish).

Lee, M. (2015). The Public Interest in Private Nuisance: Collectives and Communities in Tort. The Cambridge Law Journal, 74(2), 329-358. https://doi.org/10.1017/S000819731500032X.

McManners, P. (2012). Fly and be Damned. London – New York: Zed Books.

McMillen, D. P. (2004). Airport Expansions and Property Values: the case of Chicago O’Hare Airport. Journal of Urban Economics, 55(3), 627-640. https://doi.org/10.1016/j.jue.2004.01.001.

Miler, A. (2012). Obszar ograniczonego użytkowania. Toruń: TNOIK. (in Polish).

Niehans, J. (1987). Transaction Costs. In J. Eatwell, M. Milgate & P. Newman (Eds.), The New Palgrave: A Dictionary of Economics (pp. 676-679). London: Macmillan.

North, M. K. (1977). Current State of the Law in Aircraft Noise Pollution Control. Journal of Air Law and Commerce, 43, 799-822.

Oppio, A., & Mattia, S. (2015). How to Assess the Compensations for Home Relocation: the Case of the Malpensa Airport. Incontro di Studio del Ce.S.E.T., 77-87.

Parchomiuk, J. (2007). Odpowiedzialność odszkodowawcza za legalne działania administracji publicznej. Warszawa: C.H. Beck. (in Polish).

Pilsk, E. W. (2012). Aircraft noise Litigation in the 21st Century: A Survey of Current Issues. Issues in Aviation Law and Policy, 11(3), 371-394.

Pokrzywniak, J. (2021). Odpowiedzialność zarządzającego lotniskiem za szkody wynikające z ustanowienia obszaru ograniczonego użytkowania - glosa do wyroku Sądu Najwyższego z dnia 6 czerwca 2019 r., II CSK 222/18. Glosa, 1, 53-59. (in Polish).

Romańska-Ściseł, M. (2004). Ewolucja instytucji prawnej strefy ochronnej w prawie ochrony środowiska. Studia Iuridica Lublinensia, 4, 215-224. (in Polish). https://doi.org/10.31743/sp.8634

Schreurs, E., Verheijen, E., & Jabben, J. (2011). Valuing Aircraft noise in the Netherlands. Bilthoven: National Institute for Public Health and Environment. https://doi.org/10.4103/1463-1741.90331

Schwarz, S. L. (2011). Compensating Market Value Losses: Rethinking the Theory of Damages in a Market Economy. Florida Law Review, 63(5), 1053-1076.

Shapiro, E., Mackmin, D., & Sams, G. (2019). Modern Methods of Valuation. London-New York: Routledge. https://doi.org/10.1201/9781315145419

Suksmith, P. L., & Nitivattananon, V. (2014). Aviation Impacts on Property Values and Management: The Case of Suvarnabhumi International Airport. International Association of Traffic and Safety Sciences Research, 39, 58-71. https://doi.org/10.1016/j.iatssr.2014.07.001

Supreme Court judgment of 25 June 2015, III CSK 381/14, LEX no. 1793696.

U.S. House of Representatives. (1926). United States Code. https://uscode.house.gov

Valuation Office Agency. (2018). The Land Compensation Manual. https://www.gov.uk/government/publications/the-land-compensation-manual

van Praag, B. M. S., & Baarsma, M. A. (2005). Using Happiness Surveys to Value Intangibles: the Case of Aircraft noise. The Economic Journal, 115, 224-246. https://doi.org/10.1111/j.1468-0297.2004.00967.x

van Praag, B. M. S., & Ferrer-i-Carbonell, A. (2008). Happiness Quantified: A Satisfaction Calculus Approach. Oxford: Oxford University Press. https://doi.org/10.1093/acprof:oso/9780199226146.001.0001

Williamson, O.E. (1998). Transaction Cost Economics: How It Works; Where It Is Headed, The Economist, 146 (1), 23-58, DOI: 10.1023/A:1003263908567.

Witting, Ch. (2015). Street on Torts. Oxford: Oxford University Press.

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Copyright (c) 2024 Economics and Environment

Downloads

Download data is not yet available.