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Use of Contingent Valuation Analysis in a Developing Country: Market Perceptions of Contamination on Johannesburg’s Mine Dumps

Listed author(s):
  • Robert A. Simons


    (Professor, Levin College of Urban Affairs, Cleveland State University, Cleveland, OH 44115)

  • Jesse Saginor


    (Assistant Professor, Department of Landscape Architecture & Urban Planning, Texas A&M University, College Station, TX)

  • Aly H. Karam


    (Senior Lecturer, Town Planning, the University of the Witwatersrand, Braamfontein 2017, Johannesburg, South Africa)

  • Hlengani Baloyi


    (Town Planning, the University of the Witwatersrand, Braamfontein 2017, Johannesburg, South Africa)

Registered author(s):

    This study reports the results of a contingent valuation (CV) survey that was carried out in Johannesburg, South Africa. Students at Wits University conducted more than 300 face-to-face interviews with Africans living and/or working in Soweto, an African township located on the outskirts of Johannesburg, and nearby areas. The questions they asked were designed to determine the perceptions of risk regarding airborne mine dust and radon, a naturally occurring gas, and the effect that these perceptions had on the valuation of residential properties impacted by these substances. A probit model was used to evaluate the determinants of bidder behavior, using respondent demographics and other characteristics as independent variables. Residential property discounts for potentially contaminated housing sites by marginal bidders at the top of the market varied from -24% to -50%. Research issues in developing countries were addressed. Contingent valuation results in South Africa were compared to published results in the United States.

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    Article provided by Asian Real Estate Society in its journal International Real Estate Review.

    Volume (Year): 11 (2008)
    Issue (Month): 2 ()
    Pages: 75-104

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    Handle: RePEc:ire:issued:v:11:n:02:2008:p:75-104
    Contact details of provider: Postal:
    Asia Real Estate Society, 51 Monroe Street, Plaza E-6, Rockville, MD 20850, USA

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    Order Information: Postal: Asian Real Estate Society, 51 Monroe Street, Plaza E-6, Rockville, MD 20850, USA
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    1. Clinch, J Peter & Murphy, Anthony, 2001. "Modelling Winners and Losers in Contingent Valuation of Public Goods: Appropriate Welfare Measures and Econometric Analysis," Economic Journal, Royal Economic Society, vol. 111(470), pages 420-443, April.
    2. Rowe, Robert D. & D'Arge, Ralph C. & Brookshire, David S., 1980. "An experiment on the economic value of visibility," Journal of Environmental Economics and Management, Elsevier, vol. 7(1), pages 1-19, March.
    3. Paul R. Portney, 1994. "The Contingent Valuation Debate: Why Economists Should Care," Journal of Economic Perspectives, American Economic Association, vol. 8(4), pages 3-17, Fall.
    4. Gerald E. Smolen & Gary Moore & Lawrence V. Conway, 1992. "Economic Effects of Hazardous Chemical and Proposed Radioactive Waste Landfills on Surrounding Real Estate Values," Journal of Real Estate Research, American Real Estate Society, vol. 7(3), pages 283-296.
    5. Andrew Boraine & Owen Crankshaw & Carien Engelbrecht & Graeme Gotz & Sithole Mbanga & Monty Narsoo & Susan Parnell, 2006. "The State of South African Cities a Decade after Democracy," Urban Studies, Urban Studies Journal Limited, vol. 43(2), pages 259-284, February.
    6. Hank Jenkins-Smith & Carol Silva & Robert Berrens & Alok Bohara, 2002. "Information Disclosure Requirements and the Effect of Soil Contamination on Property Values," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 45(3), pages 323-339.
    7. Robert A. Simons & Kimberly Winson-Geideman, 2005. "Determining Market Perceptions on Contamination of Residential Property Buyers using Contingent Valuation Surveys," Journal of Real Estate Research, American Real Estate Society, vol. 27(2), pages 193-220.
    8. Robert A. Simons & Jesse D. Saginor, 2006. "A Meta-Analysis of the Effect of Environmental Contamination and Positive Amenities on Residential Real Estate Values," Journal of Real Estate Research, American Real Estate Society, vol. 28(1), pages 71-104.
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