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The Millennium Villages Project and Local Land Values: Using Hedonic Pricing Methods to Evaluate Development Projects

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  • Michelson, Hope
  • Tully, Katherine

Abstract

This paper uses hedonic analysis to estimate the impact of an area-based anti-poverty project on land values in a developing country. Economic theory would suggest that benefits of area-based programs would be capitalized into land prices, as supply is relatively fixed compared to other factors of production. While revealed preference methods have been applied widely in the field of environmental economics, they have not yet been used to evaluate an international development project. We study the effects of The Millennium Villages Project (MVP) in Sauri, Kenya. Using administrative data from the Kenyan government on prices for land bought and sold within the MVP (established in 2005) and for land bought and sold in the surrounding area during 1999–2013, we estimate the project’s effect on local land prices. We find no evidence that the MVP investments led to an increase in land prices within project areas. This research represents the first work to use hedonic analysis of land values to assess an international development project.

Suggested Citation

  • Michelson, Hope & Tully, Katherine, 2018. "The Millennium Villages Project and Local Land Values: Using Hedonic Pricing Methods to Evaluate Development Projects," World Development, Elsevier, vol. 101(C), pages 377-387.
    • Handle: RePEc:eee:wdevel:v:101:y:2018:i:c:p:377-387
    DOI: 10.1016/j.worlddev.2017.06.002
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    Cited by:

    1. Ritter, Matthias & Hüttel, Silke & Odening, Martin & Seifert, Stefan, 2020. "Revisiting the relationship between land price and parcel size in agriculture," Land Use Policy, Elsevier, vol. 97(C).
    2. Carr, Edward R., 2019. "Properties and projects: Reconciling resilience and transformation for adaptation and development," World Development, Elsevier, vol. 122(C), pages 70-84.
    3. Masset, Edoardo & García-Hombrados, Jorge & Acharya, Arnab, 2020. "Aiming high and falling low: The SADA-Northern Ghana Millennium Village Project," Journal of Development Economics, Elsevier, vol. 143(C).
    4. Sen Chakraborty, Kritika & Chakraborty, Avinandan & Berrens, Robert P., 2023. "Valuing soil erosion control investments in Nigerian agricultural lands: A hedonic pricing model," World Development, Elsevier, vol. 170(C).
    5. Mu Lin & Jingxin Gao & Yongjie Du & Pengyu Ren, 2023. "Mismatch in Urban Construction Land Use and Economic Growth: Empirical Evidence from China," Land, MDPI, vol. 12(2), pages 1-21, February.
    6. Masset, Edoardo & García-Hombrados, Jorge, 2021. "Sensitivity matters. Comparing the use of multiple indicators and of a multidimensional poverty index in the evaluation of a poverty eradication program," World Development, Elsevier, vol. 137(C).
    7. Doan, Quang Cuong, 2023. "Determining the optimal land valuation model: A case study of Hanoi, Vietnam," Land Use Policy, Elsevier, vol. 127(C).

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