Contingent Valuation Method Analysis

This paper examined the application of Contingent Valuation Method (CVM) for estimating the Option Value (OV) of Lake Bosumtwi (LB) based on the willingness-to-pay (WTP). It argues that there is maximum willingness to pay for the OV of LB and therefore it should be preserved for future personal recreation site. This could be done through ecotourism either by privatization or public ownership. Otherwise, posterity would be denied of its future value because it is getting deteriorated. In addition, the flora and the fauna eco-species as well as the fishes associated with the lake are also getting extinct as a result of human encroachment and this poses a serious challenge to biodiversity and aquatic life among others. The data were collected
This is as a result of many factors prominent among them is excessive fishing resulting in the fish stocks becoming under intense and sustained pressure. Studies by Dassah and Agbo (2003) have shown that pressure from over 1,000 fishermen in the 24 communities surrounding the lake had led to a drastic reduction of fish stocks. Also, the sizes of fish being caught presently are becoming increasingly smaller (Konadu, 2004). Moreover, there are increasing bush burning activities and other pre-mature methods of farming in the catchments area of the Lake. Again, due to rapid population growth in the area, various unregulated developmental activities in the form of building structures and construction are springing up every now and then. These activities indicate the possibility of the Lake drying up in the near future. In an interview with Nana Okogyeasuo Nkrumah II, the chief of Asaman near Kokofu in the Amansie East District of Ashanti Region, Nana said “if forests can be protected, then something must be done to protect our water bodies, especially Lake Bosumtwi, because it is getting used –up after years of fishing and other human activities”. Most often, Ghanaians do not recognize non-use and option values for environmental resources. This implies that only the use values especially the direct use values are recognized. Has this attitude been examined scientifically?
The population element used was individuals who are heads and income earners of households. These people were chosen as respondents because as family heads, culturally and economically, they are responsible for their families’ welfare. Also, because real issues are concerned, the concept of effective demand comes into play hence income earners are very important. Therefore, each individual household head was required to qualify for interview (Grandstaff and Dixon, 1986). A list of all the communities surrounding the lake were obtained and were given random numbers and fourteen (14) of them were randomly selected through simple random sampling. The total Population for the fourteen communities was 12,960 people. (Ghana Statistical Survey (G.S.S) 2010, Atwima Kwanwoma District Assembly, 2015). So with an average family size of six (6), the total number of households became 2,160, and the Sample Size was also 360. Therefore, the Systematic Sampling Method which involves the selection of household heads at regular intervals from a list of the entire households was used. In order to select the household heads to be interviewed, the total number of households (N) was divided by the Sample Size (n) to obtain the Sampling interval (K). Thus N/n = K which implies 2160/360 = 6. Hence, the household head of every 6th household was elected for interview. To be