Application of Contingent Valuation Method (CVM) in Determining Demand for Improved Rainwater in Coastal Savanna Region of Ghana, West Africa

Abstract

Coastal regions of Ghana are characterized by low annual rainfall ranging from 800mm to 900mm. This has contributed to water scarcity for domestic and agricultural use. In order for Ghana to meet the Millennium Development Goal of eradicating extreme poverty and hunger, alternative water sources must be exploited for domestic uses. This study uses the CV method as a valuation technique for non-marketed goods to estimate demand for clean rainwater for domestic use. In addition, the ordered probit model was used to determine the various factors that can influence respondents’ willingness-to-pay for clean rainwater. The study found that about 93.2% of respondents are willing to pay GH¢0.025 daily for a 34cm container of clean rainwater and this amount was observed to be influenced by some socioeconomic factors. Government involvement is therefore recommended in the provision of the modern rainwater harvesting facilities because of the incidence of poverty within the coastal savanna areas of Ghana. It is also recommended that more education on the modern method of harvesting rainwater should precede the application of any rainwater harvesting strategy in Ghana.

Key words: Willingness-to-Pay, Rainwater Harvesting Technology, Ordered Probit, Marginal Effects.