Attempts at redressing the problem of rapid deterioration of the urban environment in developing countries have not produced the desired results. This is because such attempts have been mainly ad hoc and have not taken into consideration willingness to pay for improvements in the quality of the urban environment. Consequently, in implementing environmental management programmes, planners in developing countries have a genuine lack of understanding of this willingness to pay.
Using a hedonic housing price approach, this paper presents estimates and determinants of the willingness to pay for improved environmental sanitation in the city of Lagos. Improved environmental sanitation is affected by increasing distance from a major landfill-the Achapo landfill. The empirical analysis reveals that households are aware of the disamenity effects of the landfill and are willing to pay a locational premium of about 9% of their annual housing rent in order to be one kilometre away from the landfill boundary, and thus improve the sanitation of their immediate environment. The major determinants of willingness to pay for improved environmental sanitation are: income, current level of environmental sanitation, the consumption of housing attributes complementary to improved environmental sanitation, and household size. Finally, some policy implications of the paper are discussed.