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Host Community Compensation and Municipal Solid Waste Landfills

Payments to communities from landfill developers in exchange for permission to construct, expand, or operate a landfill have become popular. The value of this host compensation varies widely, yet the factors that influence it are unexplored. We construct a unique data set of host fees paid by the 104 largest privately owned solid waste landfills in 1996. We find that citizen participation in host fee negotiations, experience hosting a landfill, state mandates for minimum host compensation, and firms with greater resources all lead to greater host compensation. We find limited evidence that neither the racial makeup or income level of the community nor the negative externalities associated with a landfill are important. (JEL R53, Q24)