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Valuing Fishing Access on Lake Victoria’s Winam Gulf: A Hedonic Pricing Model

Rex W. Sitti, Robert P. Berrens

Abstract



Economic values for fish access and water quality of lake resources can help validate and prioritize conservation measures, facilitate natural resource planning efforts, and inform benefit-cost analyses of improved fishing projects. This research uses the hedonic pricing method (HPM) to investigate values for proximity to major fishing docks, and a composite water quality measure, in the Winam Gulf area on Lake Victoria in East Africa. HPM statistically decomposes variation in owner-occupier housing sale prices and separately in rent prices to isolate marginal implicit prices for the access and quality measures. The analysis uses the 2012/2013 Kenya National Household Survey (KNHS), and a water quality index measured for 12 major fishing docks on Winam Gulf in Kenya. ArcGIS is used to measure the distance from fishing docks to the center of sub-locations. Log-linear econometric modeling results indicate that closer proximity to fishing docks positively affects property values by $1804.24 per kilometer for housing sale prices and $854 per kilometer for annual house rent prices. Although reductions in composite water quality are a rising concern in the Winam Gulf region, water quality is not yet capitalized in either house sale prices or rental rates.

Keywords


Hedonic Pricing Model, fishing access, water quality index, Winam Gulf, hedonic property values, fishing docks, marginal implicit price

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