Social costs! Pricing Ambient Air Pollution: Case of Kankoyo Township (Mufulira), Zambia

Niraj Jain, Ephraim Kabunda Munshifwa, Roy Alexander Chileshe, Ackson Mumba

Abstract


Context and background

The debate on the relationship between air pollution and its effects on residential property values is an old one in real estate economics literature, nonetheless, how affected communities are then compensated remains largely unsettled.

Goal and Objectives:

This paper examined the relationship between the emission of sulphur dioxide fumes from a mining smelter in Mufulira, Zambia and its effects on residential property values on a neighbouring township of Kankoyo.

Methodology:

The study uses Hedonic-pricing and the Contingent Valuation Method in empirically understanding the air pollution effects and property values.

Results:

The study found that Kankoyo residents pay 13.2% less rent than their counterparts in a comparable township of Chibolya which is not affected by fumes and used as a control for this study. Despite this evidence from the rental market, Kankoyo residents pay the same property tax as Chibolya residents, levied on the basis of assessed rateable values by the local authority. This implies that valuations for property tax purposes do not take into account the environmental infringements on property rights of Kankoyo residents. The study thus argues that a mechanism should be devised to tax the polluters and compensate the affected through some property tax rebate.


Keywords


Residential rental values; Rateable value; Kankoyo-Zambia; Property Tax; Ambient air pollution; Hedonic Pricing

Full Text:

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References


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DOI: https://doi.org/10.48346/IMIST.PRSM/ajlp-gs.v4i5.27221