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Estimating the willingness to pay for the removal of a local undesirable land use: The case of the Manganese ore dump and oil tank farm in the Port Elizabeth Harbour

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  • Mario Du Preez, Deborah Ellen Lee and Leann Cloete

Abstract

This paper examines the Nelson Mandela Bay public’s willingness to pay (WTP) for the removal of a local undesirable land use, the manganese ore dumps and the oil tank farm situated within the boundaries of the Port Elizabeth harbour, Eastern Cape, South Africa, by means of the contingent valuation method. Both a non-parametric and parametric estimate of the WTP is derived. Estimated WTP for the removal of this disamenity ranges from R47.09 to R93.21 per household. The aggregate WTP ranges from R13 489 683 to R26 701 496. Due to the sensitivity of the parametric estimate of WTP to functional form specification and the distribution of the random part of preferences, the less restricted non-parametric WTP estimate (R47.09) is more appropriate. The results of this study show that policy-makers should take heed of the importance communities attach to the location of pollution-creating activities in urban areas.

Suggested Citation

  • Mario Du Preez, Deborah Ellen Lee and Leann Cloete, 2013. "Estimating the willingness to pay for the removal of a local undesirable land use: The case of the Manganese ore dump and oil tank farm in the Port Elizabeth Harbour," Working Papers 338, Economic Research Southern Africa.
  • Handle: RePEc:rza:wpaper:338
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    File URL: http://www.econrsa.org/node/695
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    Keywords

    Contingent valuation; willingness to pay; dichotomous choice; parametric estimation; non-parametric estimation;

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