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

Robert A. Simons (), Jesse Saginor (), Aly H. Karam () and Hlengani Baloyi ()
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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

International Real Estate Review, 2008, vol. 11, issue 2, 75-104

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.

JEL-codes: L85 (search for similar items in EconPapers)
Date: 2008
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