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Hedonic pricing in Windhoek townships

Published online by Cambridge University Press:  23 April 2003

Michael Nokokure Humavindu  and
Jesper Stage
Michael Nokokure Humavindu
Affiliation:
Directorate of Environmental Affairs, Ministry of Environment and Tourism, Windhoek, Namibia.
Jesper Stage
Affiliation:
Department of Economics, Umeå University, 901 87 Umeå, Sweden. Tel: 46 90 786 53 36. Fax: 46 90 77 23 02. Email Jesper.Stage@econ.umu.se
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Abstract

This study applies the hedonic pricing model to property sales in the township areas in Windhoek, the capital city of Namibia, where municipal authorities have pursued a programme of selling plots of land to settlers in order to encourage them into a formalized economic situation. We find that, apart from house quality, access to the central business district, access to marketplaces and access to transportation, environmental quality also has a large impact on property prices. Properties located close to a garbage dump sell at considerable discounts, while properties located close to a combined conservation and recreation area sell at premium prices. The results thus suggest that the hedonic pricing method can be useful for studying townships in developing countries, and that this can help to clarify the importance of environmental factors which are otherwise frequently neglected in town planning for township settlements.

Type
Policy Options
Information
Environment and Development Economics , Volume 8 , Issue 2 , May 2003 , pp. 391 - 404
Copyright
© 2003 Cambridge University Press

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Footnotes

The authors would like to thank A. P. Brockerhoff, Wolf Gaerdes and Louis Lessing of Windhoek Municipality; John Mendelsohn, Carole Roberts, and Tony Robertson of the Directorate of Environmental Affairs, Ministry of Environment and Tourism; and Peder Axensten, Niklas Hanes, Jörgen Hellström, Robert Sörensson, and Lars Westin of Umeå University, for help with various stages in the data collection and data analysis. We would also like to thank a number of people at Umeå University, particularly Thomas Aronsson, Karl-Gustaf Löfgren, Niklas Rudholm, and Krister Sandberg, as well as three anonymous referees and an associate editor, for constructive comments on earlier drafts of this paper. The usual disclaimer applies. Finally, we would like to thank Jerome Kisting, then an economics student at the University of Namibia, for arguing that this valuation method was completely irrelevant to most inhabitants in the developing world, thus giving us the idea for this study in the first place.