Conference name, dates, place

2007 International Conference on Ethiopian Development Studies (4th ICEDS) A Multidisciplinary Conference on the Challenges of Peace and Development in Ethiopia & the Horn of Africa, held in Kalamazoo, Michigan (WMU), August 2-4, 2007

Document Type

Paper

Presentation Date

8-2007

Abstract

The spatial, physical and socio-economic conditions of Addis Ababa City, in general, is by far behind the requirements fundamental to sustain the livelihood of the city. In addressing the problems of the city, the suggested government intervention strategies include, among others, the relocation and resettlement of residents for efficient utilization of potential sites, and bringing balanced and coordinated investment/development in different parts of the city. These strategies, so far, seam to concentrate on the supply side and neglected the effective demand of the majority of investors. This study, therefore, aims to assess determinants of investors' willingness to pay for a particular urban land in the city. The study may help the decision makers in developing a win-win strategy in urban development sector policy in terms of achieving economic growth and improved urban development. Moreover, it may be an addition to the existing scarce literature on the issue. Data on the City’s land auction between 1994/95 and 2002/03 is the main source of data to address the issue of investors' willingness to pay for urban investment land. Other relevant secondary data are also used as a source of information. We used ordinary least square estimation to analyze the determinants investors' value on urban investment land. The study findings indicated that investors' offer value (as measured by their markup price) for a particular urban land is positively affected by plot grade, investors' capital, accessibility to basic services and plot for apartment. Investment cost negatively affects investors' willingness to pay for particular urban land. Benchmark or floor price of the plot positively affects their markup value. The study, in particular, suggests that investment opportunities ought to be given to private investors since they are willing to invest and offer higher price given the investment land has access to basic social services, and priority is given for some investment sector.

Comments

The researchers owe a great debt to the Organization for Social Science Research in Eastern and Southern Africa (OSSREA) for the financial support of this research project. We are also indebted to all those who assisted us directly or indirectly to the accomplishment of the research.

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