Stigma, perception and the remediation of contaminated land

Stigma has been identified as a key factor in lowering the value of land which is actually, or potentially, contaminated. A wide ranging debate has explored its causality. In this debate, market perception has received increasing emphasis as an analytical perspective. From this viewpoint, the paper seeks to explore the effect of stigma on a landowner's remediation expenditure. Two market perceptions of stigma are identified: pre and post-remediation; additionally, subcategories of the former, as well as an amalgamation of both, are also specified. Each perception is related to its associated maximum remediation expenditure in an ex ante setting utilizing an expected utility approach. Ordinal rankings of remediation expenditure are derived for various market perceptions of stigma where contamination is, or is not, certain. In general, post-remediation stigma is associated with lower remediation expenditure than pre-remediation stigma. Further, it is demonstrated that increases in different perceptions of stigma may, depending on the context, increase or decrease maximum remediation expenditure.