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

Author

Listed:
  • 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)

Abstract

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.

Suggested Citation

  • Robert A. Simons & Jesse Saginor & Aly H. Karam & Hlengani Baloyi, 2008. "Use of Contingent Valuation Analysis in a Developing Country: Market Perceptions of Contamination on Johannesburg’s Mine Dumps," International Real Estate Review, Global Social Science Institute, vol. 11(2), pages 75-104.
    • Handle: RePEc:ire:issued:v:11:n:02:2008:p:75-104
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    References listed on IDEAS

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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.
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    5. 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.
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    Cited by:

    1. Isabel Mendes & Idalina Dias Sardinha & Sérgio Milheiras, 2013. "Methodological Issues for Estimating the Total Value of the Rehabilitation of Mining Fields: the Case of S. Domingo’s Mine," International Journal of Finance, Insurance and Risk Management, International Journal of Finance, Insurance and Risk Management, vol. 3(4), pages 593-593.

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    • L85 - Industrial Organization - - Industry Studies: Services - - - Real Estate Services

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