See discussions, stats, and author profiles for this publication at: https://www.researchgate.

net/publication/325367501

ECONOMIC VALUATION OF WATER RESOURCES AT CHIA LAGOON IN

NKHOTAKOTA DISTRICT, MALAWI MASTER OF SCIENCE IN WATER
RESOURCES AND SUPPLY MANAGEMENT

Thesis · January 2017

DOI: 10.13140/RG.2.2.13923.04644

CITATIONS READS

0 1,494

1 author:

Rodgers Makwinja
Department of Fisheries, Malawi
38 PUBLICATIONS   254 CITATIONS   

SEE PROFILE

Some of the authors of this publication are also working on these related projects:

MSc Research View project

PhD Research Project View project

All content following this page was uploaded by Rodgers Makwinja on 25 May 2018.

The user has requested enhancement of the downloaded file.

 ECONOMIC VALUATION OF WATER RESOURCES AT CHIA LAGOON IN
NKHOTAKOTA DISTRICT, MALAWI

MASTER OF SCIENCE IN WATER RESOURCES AND SUPPLY MANAGEMENT

RODGERS MAKWINJA

UNIVERSITY OF MALAWI

THE POLYTECHNIC

APRIL, 2017
 ECONOMIC VALUATION OF WATER RESOURCES AT CHIA LAGOON IN
NKHOTAKOTA DISTRICT, MALAWI

Rodgers Makwinja
(MSc. Fisheries, BSc. Aquaculture & Fisheries)

A thesis submitted to the Faculty of Applied Sciences, Department of Physics and

Biochemical Sciences in partial fulfilment of the requirements for the award of a Degree of
Master of Science in Water Resources and Supply Management (MSc. WRSM)

University of Malawi

The Polytechnic

April, 2017
 DECLARATION
I, Rodgers Makwinja, declare that this thesis is a result of my own original effort and work,
and that to the best of my knowledge, the findings have never been previously presented to the
University of Malawi or elsewhere for the award of any academic qualification. Where
assistance was sought, it has been accordingly acknowledged.

Name: Rodgers Makwinja

Signature: ___________________

Date: _______________________

ii
 CERTIFICATE OF APPROVAL

The undersigned certify that they have read and approve for acceptance by the University of
Malawi, The Polytechnic this thesis entitled, ‘Economic Valuation of Water Resources at
Chia Lagoon in Nkhotakota District, Malawi.’

Postgraduate Dean: Dr. Peter Mhagama

Signature: ---------------------------------------------

Date: ---------------------------------------------------

Main Supervisor: Dr. Ishmael Bobby Mphangwe Kosamu

Signature: ---------------------------------------------

Date: ---------------------------------------------------

Co-supervisor: Dr. Chikumbusko Chiziwa Kaonga

Signature: ---------------------------------------------

Date: -----------------------------------------------------

Head of Department : Dr. Chikumbusko Chiziwa Kaonga

Signature: ---------------------------------------------

Date: -----------------------------------------------------

iii
 DEDICATION

I dedicate this thesis to all my family members who encouraged me during the course of my
study.

iv
 ACKNOWLEDGEMENTS

I sincerely give thanks to my supervisors Dr. Ishmael B.M. Kosamu and Dr. Chikumbusko
Chiziwa Kaonga for their tireless effort in supervising, guiding and encouraging me during the
entire period of study. My sincere gratitude goes to University of Malawi, The Polytechnic for
hosting me during the course of study. I also recognize the Ministry of Agriculture, Irrigation
and Water Development, Department of Fisheries (DOF), in particular Nkhotakota District
Fisheries Office for providing me with relevant data for Chia lagoon fish catches and the
average beach price. My classmate Charity Kanyika provided a warm atmosphere during my
study period. The best time we shared together cannot easily be forgotten. All technical
assistants from Nkhotakota District Fisheries Office are acknowledged for the diligent help
rendered to me during the data collection period. I would like to also sincerely thank the
communities around Chia lagoon for their lively participation in the data collection.

v
 ABSTRACT

The study was conducted to examine economic value of water resources at Chia lagoon in
Nkhotakota, Malawi. Chia lagoon is the largest lagoon in Malawi with a water surface area of
17 km2. The lagoon supports the livelihood of over 7857 households. The purpose of carrying
out the study was: to provide a simple economic pricing theory, highlight the implications of
changes in water quality and quantity for human wellbeing and provide policy development
with new insights on factors influencing the public’s valuation of the resources. The study used
stratified random sampling design to obtain a sample size of 101 from about 7857 households.
Primary data was obtained through administering a well-structured questionnaire. Secondary
data for water resources economic valuation were extracted from relevant documents such as
reports, books, journals and internet articles. Gross Output Value (GOV) was used to estimate
total annual economic value of the lagoon. Contingent valuation method was applied to
estimate household willingness to pay for water resources at the lagoon. Gini coefficient
estimated income distribution among the households from various economic activities. Logit
model was applied to identify key factors affecting household’s willingness to pay for water
resources conservation at the lagoon. The economic valuation results showed that water
resources at Chia lagoon provide an annual monetary value of MK2.7 billion (US$3,7 million).
The contingent valuation results showed that households around the lagoon are willing to pay
an annual aggregate value ranging from MK65.7 million (US$89569.8) to MK7.7 billion
(US$10.5 million) and on average MK0.74 billion (US$1,011,824.46) to improve the status of
water resources at the lagoon. The study displayed linkage between households’ income from
various economic activities and the willingness to pay evidenced by the Gini coefficient which
was above 0.5 in income generated from agricultural activities and less than 0.5 in off farm
activities. Logit model statistically demonstrated that some demographic, social-economic and
institution factors significantly (P<0.05) affected household’s willingness to pay at α = 0.05.
In conclusion, the study highlighted that Chia lagoon water resources has high economic value.
Furthermore, at MK 718.83 (US$0.98) willingness to pay amount, management of the water
resources at Chia lagoon could be preferred by the majority. As indicated in the study that about
57.4% of the households were willing to pay to improve the status of water resources at the
lagoon, it is recommended that a tax/levy be introduced for using the water resources at the
lagoon in order to support local management institutions. Proceeds could significantly
contribute to alleviating budgetary constraints faced by authorities in undertaking water
conservation measures in the lagoon.

vi
 TABLE OF CONTENTS
DECLARATION .......................................................................................................................ii

CERTIFICATE OF APPROVAL ............................................................................................ iii

DEDICATION ..........................................................................................................................iv

ACKNOWLEDGEMENTS ....................................................................................................... v

ABSTRACT ..............................................................................................................................vi

TABLE OF CONTENTS .........................................................................................................vii

LIST OF TABLES ..................................................................................................................... x

LIST OF FIGURES ..................................................................................................................xi

LIST OF ABBREVIATIONS AND ACRONYMS............................................................... xiii

LIST OF APPENDECES ......................................................................................................... xv

CHAPTER I: .............................................................................................................................. 1

INTRODUCTION ..................................................................................................................... 1

1.1 Background Information .............................................................................................1

1.1.1 General significance of water resources ..............................................................1

1.1.2 Water as an economic good .................................................................................1

1.1.3 Water as a public good .........................................................................................2

1.1.4 Water resources and economic theory .................................................................4

1.1.5 Chia lagoon as a public good ...............................................................................4

1.1.6 The philosophy of water resources economic valuation ......................................4

1.2 Problem statement .......................................................................................................5

1.3 Research objective .......................................................................................................6

1.3.1 Specific objectives ...............................................................................................6

1.3.2 Research questions ...............................................................................................7

CHAPTER II: ............................................................................................................................. 8

vii
LITERATURE REVIEW........................................................................................................... 8

2.1 General overview of lagoons .......................................................................................8

2.2 Water resources economic valuation ...........................................................................9

2.3 Theoretical framework of economic valuation techniques .......................................11

2.4 Economic valuation methods ....................................................................................12

2.4.1 Hedonic pricing method .....................................................................................12

2.4.2 Travel cost method .............................................................................................13

2.4.3 Contingent valuation method .............................................................................14

2.5 Econometric models ..................................................................................................15

CHAPTER III: MATERIALS AND METHODS ................................................................... 17

3.1 Study area ..............................................................................................................17

3.2 The sample and sampling procedure .........................................................................20

3.2.1 Determination of sample size .............................................................................20

3.2.2 Data validity and reliability................................................................................21

3.2.3 Ethical issues ......................................................................................................21

3.2.4 Data collection techniques for objective 1 .........................................................22

3.2.5 Data collection techniques for objective 2 .........................................................23

3.2.6 Data collection techniques for objectives 3 .......................................................24

3.2.7 Statistical Analysis .............................................................................................26

CHAPTER IV: ......................................................................................................................... 27

RESULTS AND DISCUSSION .............................................................................................. 27

4.1 Introduction ...............................................................................................................27

4.2 Estimation of total economic value ...........................................................................27

4.2.1 Analysis of socio-economic dependence on Chia lagoon water resources ........27

4.2.2 Indirect economic value of water resources .......................................................32

viii
 2.2.3 Direct economic value accruing from the water resources at Chia lagoon ........38

2.3 Economic valuation of the willingness to pay...........................................................43

2.3.3 Current status of water resources at Chia lagoon ...............................................43

2.3.4 Economic implications of current water quality degradation at Chia lagoon ....46

2.3.6 Analysis of the household’s responses towards varying bid amount .................48

4.2.5 Analysis of the monetary value the communities are willing to pay to conserve
water resources at Chia lagoon .........................................................................................52

4.2.6 Analysis of income inequality and willingness to pay .......................................52

4.3 Analysis of factors influencing the willingness to pay..............................................57

4.3.1 Descriptive statistics of empirical demographic variables .................................57

4.3.2 Descriptive statistics of socio-economic variables ............................................61

4.3.3 Descriptive statistics of institution factors .........................................................65

CHAPTER V: CONCLUSION AND RECOMMENDATIONS ............................................ 72

REFERENCES......................................................................................................................... 74

APPENDENCES ..................................................................................................................... 93

APPENDIX 1: ANNUAL FISH CATCHES (METRIC TONE) AND ANNUAL

REVENUE (MK) .................................................................................................................93

APPENDIX II: ESTIMATION OF CORRELATION MATRIX ........................................94

APPENDIX II: HOUSEHOLD QUESTIONNAIRE ...........................................................95

ix
 LIST OF TABLES
Table 4. 1: Analysis of Socio - economic dependence on Chia lagoon water resources .........27

Table 4. 2 Number of animals per households .........................................................................38

Table 4. 3 Annual revenue from livestock (MK) .....................................................................39

Table 4. 4:Yield from crop production ....................................................................................40

Table 4. 5: Income (MK) generated from farming ..................................................................40

Table 4. 6: Income (MK) from off farm activities ...................................................................40

Table 4. 7: Total annual catch (ton) and revenue (MK) ...........................................................41

Table 4. 8: Major implication of water quality degradation at Chia lagoon ............................46

Table 4. 9: The willingness to pay amounts .............................................................................47

Table 4. 10: Households income inequality .............................................................................52

Table 4. 11 Income distribution ...............................................................................................54

Table 4. 12: Cumulative income of the households from four quartiles ..................................55

Table 4. 13: Descriptive statistics of demographic factors ......................................................58

Table 4. 14: Effects for the best fitted logistic regression model of demographic variables ...59

Table 4. 15: Social-economic factors .......................................................................................62

Table 4. 16: Effects for the best fitted logistic regression model of socio economic variables
..................................................................................................................................................63

Table 4. 17: descriptive statistics of institution factors ............................................................66

Table 4. 18: Effects for the best fitted logistic regression model of demographic variables ...67

x
 LIST OF FIGURES

Figure 2. 1 Classification of lagoons (Adapted from Kjerfve, 1994). .......................................9

Figure 3. 2 Map of Malawi showing the Location of Nkhotakota district ...............................17

Figure 3. 3 Geographical location of Chia lagoon in Nkhotakota District ..............................18

Figure 3. 4 Geographical and ecological characteristics of Chia lagoon .................................19

Figure 4. 5 : Farming, fishing and petty trade at Chia lagoon .................................................28

Figure 4. 6 :Percentage of main economic activities and household’s main occupation .........30

Figure 4. 7 :Fishing activities at Chia lagoon ..........................................................................30

Figure 4. 8 : Rice cultivation at Chia lagoon during the winter season ...................................31

Figure 4. 9 :Water resources services ......................................................................................32

Figure 4. 10 : Fish breeding ground at Chia lagoon .................................................................33

Figure 4. 11 Chia lagoon being used as a transportation route ...............................................34

Figure 4. 12: Livestock grazing at Chia lagoon periphery ......................................................34

Figure 4. 13 Chia lagoon natural amenities .............................................................................35

Figure 4. 14: Tourists enjoy scenic view at Chia lagoon .........................................................36

Figure 4. 15 : Cultural and control Services ............................................................................36

Figure 4. 16 : Researcher collecting data at Chia lagoon .........................................................37

Figure 4. 17 Number of livestock per household ....................................................................38

Figure 4. 18 Types of crops grown by the communities around Chia lagoon .........................39

Figure 4. 19 Turbid water in Chia lagoon in March and April of 2016 ...................................43

Figure 4. 20 Duration of water resources remain clear at the lagoon .....................................44

Figure 4. 21 Major contribution of water quality degradation at Chia lagoon ........................44

Figure 4. 22 Categories of water quality at Chia lagoon..........................................................45

Figure 4. 23 Major indicators of water quality degradation at Chia lagoon ............................46

xi
Figure 4. 24 Analysis of bid responses ....................................................................................48

Figure 4. 25 Main reasons for household willingness to pay ...................................................50

Figure 4. 26 : Main reasons for household not willing to pay .................................................51

Figure 4. 27 The Lorenz Curve showing the level of inequality in the income distribution
among the households ..............................................................................................................53

Figure 4. 28 The Lorenz Curve showing the level of inequality in the income distribution
among the households ..............................................................................................................54

Figure 4. 29: The Lorenz Curve showing the level of inequality in the income distribution
among the households ..............................................................................................................55

xii
 LIST OF ABBREVIATIONS AND ACRONYMS

IWRM ........................................................................ Integrated Water Resource Management

GOM ..................................................................................................... Government of Malawi

DOF ...................................................................................................... Department of Fisheries

WTP ............................................................................................................. Willingness to pay

TCM ........................................................................................................... Travel Cost Method

HPM ................................................................................................... Hedonic Pricing Method

AB ......................................................................................................... Advertising Behaviour

SP ................................................................................................................... Stated Preference

CVM ........................................................................................... Contingent Valuation Method

CA ................................................................................................................. Conjoint Analysis

GOV ............................................................................................................. Gross output value

NGO ...................................................................................... Non-Governmental Organisation

US$) ........................................................................................................... United States Dollar

MK .................................................................................................................. Malawi Kwacha

GH ............................................................................................... gender of the household head

AGH ................................................................................................ Age of the household head

CS ............................................................................................................................. Civil status

LL ......................................................................................................................... Literacy level

HS ...................................................................................................................... Household size

LMSI ........................................................................................ Lagoon main source of income

LMSWA .............................................................. Lagoon main source of water for agriculture

LOS .................................................................................................................. Land ownership

FLP .............................................................................................. Farm in the lagoon periphery

xiii
AGL ..................................................................................................... Access to grazing lands

PIF ..................................................... Practice irrigation farming using water from the lagoon

AFG .................................................................... Access to food gathering from lagoon waters

DBLP ............................................................................ Does business in the lagoon periphery

CS ............................................................................................................................. Civil status

ST .......................................................................................................... Household ‘social trust

WRCCESNI ............... Water Resources Conservation Civic education and social networking
involvement

IT ....................................................................................................................... Institution trust

KWDD ........................................... Knowledge of water resources degradation and depletion

WRPDH .............................................. Water resources problem directly affect the household

AEXTS ......................................................................................... Access to extension services

KKWRUR ............................................................... Knowledge on water resources user rights

AIIWRM ........................... Access to information on Integrated water resources management

xiv
 LIST OF APPENDECES
Appendix 1: Annual fish catches (metric ton) and annual revenue.………………………93

Appendix ii: Estimation of correlation matrix………………………………………….…94

Appendix ii: Household questionnaire…………………………………….........................95

xv
 CHAPTER I

INTRODUCTION

1.1 Background Information

1.1.1 General significance of water resources

Water resources in a lagoon plays an important role in the biological, hydrological, economic,
socio-cultural and aesthetic characteristics of the environment (Odine , Shittu , Ayinde and
Olubanjo , 2011). Lagoons provide a variety of ecological functions that directly or indirectly
translate to economic services and values to communities (Eggert and Olsson, 2009).
Additionally, the resources support a diversity of aquatic organisms such as fish that constitute
a significant source of protein for human consumption, sustain ecosystem stability through
conservation of biodiversity (Hanley, Bell and Alvarez-Farizo, 2003), mitigate against climate
change through carbon sequestration, act as sinks for by products of agricultural activities and
provide recreational and aesthetic benefits to the humans (Remoundou , Koundouri a, Areti ,
Nunes and Skourtos, 2009). As much as water resources enormously contribute to the
cornerstone of economic activities, it is indispensable to understand its economic value. This
is fundamental, because evidence has shown that water is considered as both economic and
public good (Robbins, 1935).

1.1.2 Water as an economic good

It is important to note that water was officially recognized as a scarce resource by the
international community (Solanes and Villarreal, 1999). Bardini (1999) noted that water
scarcity in many places of the world can be economic especially when there is insufficient
human capacity to keep up with the growing water demand. Harun, Muresan, Arion, Dumitras
and Lile, (2015) also observed that the current water policies treat water as an economic good.
Dinar (2003) in ‘Economics of Water Management in Developing Countries,’ also noted that
water scarcity is not only originating from quantitative or qualitative scarcity, but also from
inefficient use and poor management. The 1992 Dublin Statements further declared that water
resources are not infinite and are “vulnerable” (Solanes and Villarreal, 1999). Additionally, the
fourth principle of the 1992 Dublin Statements put “water as an economic good” (ICWE,
1992).

1
The principle behind defining water as an economic good is based on the fact that like any
other goods, water has a value to users and the users must be willing to pay for it (Perry, Rock,
and Seckler, 1997). In other words, the value of water to a user can be defined by the maximum
amount the user is willing to pay for the use of the resource. According to Ndebele (2009), if
water is considered as an economic good, then it must conform to the principle of standard
economic theory which predicts that under perfectly competitive conditions, market resources
must be efficiently allocated and utilised.

Unfortunately, these economic principles in the natural and environmental resources such as
water resources in rivers, lakes, lagoons are frequently violated which consequently seek the
interventions of government. Government intervention works in such a way that pareto
optimality (a state of allocation of resources from which it is impossible to reallocate so as to
make any one individual or preference criterion better off without making at least one
individual or preference criterion worse off) is achieved where equilibrium in production,
consumption and exchange coincides. Again, the fact that water is also considered as a public
good, willingness to pay for the utilization of the resources depends largely on the ability to
pay of an individual user (Agudelo , 2001). This brings another dimension of water as a public
good.

1.1.3 Water as a public good

Natural and environmental resources such as water resources in rivers, lakes, lagoons that yield
flows of goods and services such as fish, recreation, aesthetics and others are classified as
public goods. Under economic theory, these goods and services are non-rivalry and non-
excludability in consumption (Bonnie, 2009). Non-rivalry in consumption means that
consumption of these goods by one particular individual does not diminish the consumption of
the same goods by others; while non-excludability means that once these goods are available
to one particular individual, others cannot be excluded nor deprived of consuming the same
goods.

However, according to the theory of the tragedy of the commons, water resource experiences
possible threats to its sustainability if it is left unregulated. Apparently, in ‘open access’, any
user or group of users is/are unable to limit access and unwise use of the resource (James and
Barton, 2010). According to Bonnie (2009), the users’ behavior is uncontrollable, in terms of
protecting common interests and environmental sustainability. In other words, individuals are

2
free to use the resources to the extent of their need. Ultimately, such exploitation of resources
leads the commons to a tragedy that might even lead the resources to the extent of extinction.
Earlier, Hardin (1968) argued that holding a thing in common is not by itself problematic; the
crisis is most likely experienced when a large number of people enjoy a common right over a
thing. He noted that if the commons are left unregulated, the extent of exploitation relies on the
judgment of the users themselves, and he doubted if individual rational users would work to
sustain the long-term interests of the common users. Hardin (1968) further noted that
individuals who exploit the commons excessively leave fewer resources for those users who
commit themselves. This implies that in the absence of any rules restricting the access and
extent of use, the open-access resources might even lead to the extent of extinction. Due to
such adverse consequences, Hardin’s theory criticized the political-economic model of leaving
the resources as open-access. According to Hardin’s theory, the supply of public goods such as
water resources must be facilitated through public policy where the government, through its
various institutional arms must plan and manage the resources for the benefit of all.

However, Baerlaine, Kasymov and Zikos (2015) contradicted Hardin’s theory and argued that
government policies related to the management of public goods such as water resources are a
current problem throughout the world. Baerlaine et al. (2015) further argued that economic
analysis of public environmental policies often ignores the value of non-market goods and
services such as water resources due to the fact that their values are not readily available
compared to their counterparts. McKinney, Cai, Rosegrant, Ringler and Scott (1999) in the
book titled ‘Modelling water resources management at the basin level,’ suggested that water
managers and policy makers need to have a thorough understanding of the economic value of
water and its various uses as well as the powerful information systems that integrate
hydrological, economic and social dimensions of water supply and demand within the
framework of an integrated water resource management (IWRM) system.

Unfortunately, such information is hardly available in most developing countries such as

Malawi due to limited non-market economic valuation studies. Consequently, the policy
implementations and alternative policy options are difficult. The consequences of lack of policy
implementations and alternative policy options have been over exploitation and degradation of
water resources in many rivers, lakes, lagoon and reservoirs. In Malawi, although, National
Water Policy promotes public and private sector participation in water resources management,
supply and conservation (Government of Malawi [GOM], 2004), the policy objective is
3
difficult to achieve due to lack of economic information and human capacity to keep up with
growing water demand in water bodies.

1.1.4 Water resources and economic theory

Economic theory of water resources is rooted in the idea that water resources are scarce
(Freeman, 2003), which means that the demand for water resources is higher relative to their
availability (Agudelo, 2001). Hence non-market valuation techniques which aimed at
estimating monetary values for non-market goods and services such as water resources
(Costanza, Darge, De Groot, Farber, Grasso and Hannon,1997) are required. Where nonmarket
value information of public goods such as water resources is recognized and incorporated in
the decision-making process, better public policies can be formulated that can reflect social,
economic, efficient and sustainable utilization of the resources for future generation.

1.1.5 Chia lagoon as a public good

Water resources at Chia lagoon provides a good illustration of a public good. Being a common
pool asset, the resources have been overexploited. With no clearly defined policies, property
rights and management plan to conserve and protect the quality and quantity of water resources,
the lagoon has been over stressed from over fishing, pollution, siltation and pest and weed
invasions. Banderson et al. (2008) stressed that opening new land for agriculture, cultivation
on steep slopes and stream banks, poor farming practices, felling of trees for wood, and setting
bush fires which destroy or degrade valuable vegetative cover significantly contributed to the
serious problems of water runoff and loss of top soil, especially in the upper reaches of the
watershed leading into sedimentation of Chia lagoon. Sedimentation of the lagoon has
negatively affected the lagoon’s rich biodiversity and the livelihoods of the local communities.
With wide expansion of human settlements in the lagoon periphery, the fisheries resources
have further collapsed due to human pressure and climate change with economic and social
consequences for humans (Intergovernmental Panel on Climate Change [IPCC]), 2007;
European Science Foundation [ESF], 2007).

1.1.6 The philosophy of water resources economic valuation

Although there are no records or any published scientific information on the status of water
resources in terms of quality and quantity at Chia lagoon, local perceptions show that dating
back to 20 years ago, high quality and large volume of water resources existed in the lagoon.
From 20 years to date, the status of water resources at the lagoon has changed. People are
4
increasingly using water resources in the lagoon for agricultural purposes and also to sustain
their livelihood, thus, the lagoon’s water resources are degrading at a faster rate with serious
economic implications (Banderson, et al., 2008). Elsewhere, studies have shown that water
resources are consumed in an unsustainable manner to the extent that their continuous existence
may not be guaranteed for the future generations (Barbier, Acreman and Knowler, 1997). The
situation is not different in Malawi especially at Chia lagoon. The lagoon has seriously
experienced degradation of water resources because of agricultural activities, irrigation
development, climate change, drought and other human activities (Banderson, et al., 2008).
Fisheries, farming and wildlife are all impacted by these hydrological changes (Chavula, 1999).

Therefore, the main goals of this research were to apply the most relevant non-market economic
valuation technique to estimate economic value of water resources in the lagoon using
households as an economic decision-making tool (Briscoe, 2015). The study provides a total
economic value estimate of the lagoon water resources to provide the basis for policy
formulation and recommendations. The study further highlights much more clearly the
economic implications of changes in water quality and quantity to the communities around the
lagoon. Additionally, the study displays how the distribution of income generated from various
economic activities taking place around the lagoon affects social willingness to pay for the
conservation of water resources at the lagoon.

1.2 Problem statement

Experience shows that in all regions of the world, human populations are suffering socio-
economic and environmental hardships as a result of destruction and mismanagement of their
natural resources, notably water resources (Struip, Baker and Oosterberg, 2002). In Malawi,
this destruction, is continuing at an alarming rate contributing to escalating poverty, water
supply and food security problems, as well as robbing Malawi of the aquatic biological
diversity with which water resources are endowed. Again, Malawi’s high population density
and the dependence of Malawians on agricultural production in the absence of other economic
opportunities have led to alarming rates of water resources degradation (GoM, Malawi State of
Environment and Outlook Report:Environment for Sustainable Economic Growth, 2010).
According to Malawi State of Environment and Outlook Report (2010), the degradation of
natural resources such as water resources will continue to be a major threat to the social and
economic development of Malawi.

5
Malawi Government has taken various measures to safeguard the country’s natural resource
base. These include, inter alia, the enactment of the Environmental Management Act of 1996;
the Forestry Policy of 1997; the Land Policy of 2002 and the Water and Sanitation Policy of
2005 and the National Water Policy (2004). Nevertheless, information on economic values of
water resources hardly exists in these documents making it so challenging to adopt sustainable
and economic utilization of water resources in reservoirs such as lagoons. Chipofya, Kainja,
and Bota (2009) also observed that government, to date, has failed to address the problem of
water resources depletion and degradation because of limited policy incentives to attract and
sustain public and private investments for responsible utilization of water resources while
protecting and conserving the natural environment.

Several studies focusing on management of water resources in rivers have been conducted in
Malawi. For instance, Mulwafu (2000) studied conflicts over water use in Likangala River,
Zomba District. Mulwafu and Nkhoma (2001) further studied the use and management of water
in the Likangala irrigation scheme complex. Jamu, Banda, Njaya and Hecky (2011) studied the
impacts of land use and cover changes in the Likangala catchment of the Lake Chilwa basin,
Malawi with emphasis on implications for migrating fish species. Recently, Makwinja,
Chapotera, Likongwe, Banda and Chijere, (2014) studied the location and roles of deep pools
in Likangala River during 2012 recession period of Lake Chilwa basin. However, these studies
also failed to link with simple economic pricing theory to provide quantitative and monetary
values of water resources in the reservoirs, rivers or lagoons. The previous studies also failed
to highlight much more clearly the implications of changes in water quality and quantity for
human wellbeing and also provide policy development with new insights on factors influencing
the public’s valuation of the resources in the water bodies. Therefore, these various research
gaps necessitated this study in which the economic value of water resources at Chia lagoon in
Nkhotakota district, Malawi was assessed.

1.3 Research objective

The main objective of the study was to assess the economic value of water resources at
Chia lagoon in Nkhotakota district, Malawi.

1.3.1 Specific objectives

The specific objectives of the study were to:

i. Estimate the total economic value accruing from water resources at Chia lagoon.
6
 ii. Estimate the amount of money households are willing to pay in order to improve the
status of water resources at Chia lagoon.
iii. Analyse factors that influence the willingness to pay in order to improve the status of
water resources at Chia lagoon.

1.3.2 Research questions

i. How much is the total economic value accruing from water resources at Chia lagoon?
ii. How much are the households willing to pay in order to improve the status of water
resources at Chia lagoon?
iii. What are the factors that influence the households’ willingness to pay in order to
improve the status of water resources at Chia lagoon?

7
 CHAPTER II

LITERATURE REVIEW

2.1 General overview of lagoons

The word lagoon is derived from the Italian word laguna which means a shallow body of water,
in turn, derived from the Latin word lacuna, meaning pool, hollow or gap. It is a shallow,
coastal body of water, separated from the ocean/fresh water lake by a barrier (Kennish and
Paerl, 2010). The barrier can be formed by a coral reef, barrier islands, a sand bar or spit, hingle,
or, less frequently rocks (Kjerfve, 1994). There is a great range in size of lagoons, with the
smallest being about a 0.01km2 in size and the largest, being more than 1km2 (Kennish and
Paerl, 2010). Lagoons are usually located parallel to the shoreline, and are often longer
(Kennish and Paerl, 2010). They usually do not have large rivers flowing into them. In very
large lagoons, however, sometimes, there are flowing rivers. The depth of a lagoon seldom
exceeds a few metres (Kjerfve, 1994). Because of this shallowness, lagoons are highly
susceptible to changes in precipitation, evaporation and wind. Depending on the size of the
barrier which impedes the flow of water in and out of the lagoon, coastal lagoons may be
partially or entirely enclosed (Kennish and Paerl, 2010).

Lagoons are classified into choked, restricted and leaky as shown in Figure 2.1. Choked
lagoons usually have a narrow channel to the sea or main lake and form in areas where the
energy of waves is high. The narrow inlet mostly prevents the tides from entering, and also
prevents much mixing of water (Kjerfve, 1994). Examples of chocked lagoons include Mundel
Lagoon and Rekawa Lagoon in Sri Lanka, the Songkhla Lake in Thailand and the Lagoa dos
Patos in Brazil (Jayasiri and Rajapaksha, 2000) and Chia lagoon in Malawi. Restricted lagoons
have more than one channel to the sea/lake, temporarily ‘restricting’ water exchange, but in
reality, there is good water exchange, and a net transport of water. The flushing time is very
much shorter than in choked lagoons. Uppar Lagoon, in eastern Sri Lanka and the Laguna de
Terminos in Mexico are examples of restricted lagoons (Kjerfve, 1994).

8
Figure 2. 1 Classification of lagoons (Adapted from Kjerfve, 1994).

Leaky lagoons have wide channel(s) to the sea, unhindered interchange of water and fast water
currents. As Kjerfve (1994) says, ‘leaky lagoons occupy the opposite end of the spectrum from
choked lagoons’. The Mississippi Sound in USA is an example of a leaky lagoon.

2.2 Water resources economic valuation

Baumann and Boland, (1998) wrote: "Water is not different from any other economic good. It
is no more a necessity than food, clothing, or housing, all of which obey the normal laws of
economics. According to the law of economics, the demand for water resources indicate that
the resources are worth to people and their supply indicate cost. The market price of water
reflects the interaction of both demand and supply. Based on the theory of demand and supply,
the economic value of water can be conceptualized by determining the monetary value which
an individual would be willing to exchange for the resources if it were possible to make such
an exchange in a real market.

9
For the past decades, identifying and quantifying water resources in monetary terms has not
been a straight-forward issue. Furthermore, scientific modelling has attempted to identify and
quantify the water resources in lagoons but has failed to exhibit clear and usable policy
indicators corresponding to the services delivered by the water resources in the lagoon
(Remoundou et al.,2009). Additionally, many of the goods and services provided by water
resources are non-marketable. This has further complicated economic valuation studies of the
resources. Other previous studies have also revealed that benefits derived from water resources
are rarely considered in private investment and economic policy analysis (Birol, Karousakis,
and Koundouri, 2006) due to limited availability of economic data which otherwise could help
to identify appropriate water policy option that could respond to the problem of water resources
degradation in water bodies. Again, due to lack of water resources economic data, it has been
commonly assumed that the problem of water resources in the world is politics not economics.
However, this is not entirely correct. According to Hanemann (2005), the generic problem of
water resources in the world is of matching demand with supply to ensure that there is water
of a suitable quality at the right location and at the right time and at a cost that people can afford
and are willing to pay. In practice, many economists in the past have tried to formalize many
of the benefits of water resources using the concept of a production function (Hanemann, 2005).
A production function was conceived as an empirical, causal relationship between the levels of
inputs required to produce an output, or an outcome. However, this has been surprisingly
difficult to achieve due to limited econometric data availability.

To address the above challenges, recent environmental economists have developed various
methods to value environmental costs and benefits in monetary terms. The most commonly
used method has been non-market economic valuation technique. According to Bennett (2005),
a key feature of non-market economic valuation is the consideration of resource use choices
that have impacts on enviromental assets (water resources) that are not bought and sold in real
markets. Bennett (2005) observed that for economists to say much about such choices within
the framework of neoclassical welfare economics, it requires an ability to estimate non-market
enviromental resources (water resources) benefits or costs involved in monetary terms.
Adamowicz (2004) noted that to provide such estimates acculately is a critical challenge.
However, Cameron (1992) earlier argued that non-market economic valuation is one of the
economic tools that can allow the cost benefit analysis for policy guidance and thus ranking of
alternative prevention, restoration and enhancement of policy options. Derrin and Gartside
(2001) further added that non-market economic valuation technique allows economists to
10
perform environmental accounting to assess natural resource damage and carry out proper
pricing of the environmental resources such as water.

2.3 Theoretical framework of economic valuation techniques

Economic valuation estimates a monetary value for goods and services that have no market.
The technique employs analytical tools from microeconomics, welfare economics and
econometrics (Haab and McConnell, 2003). Economic theories in this context illustrate how
humanity largely provides for itself by standing on the shoulders of natural systems such as
water resources. Based on this theory, human demand on the natural environmental resources
such as water resources link to the principles of demand and supply relationship (Pearce, 2007).
The interaction of supply and demand curves clearly illustrate the economic cost of the supply
or the cost incurred to gain an additional high quality and quantity of the environmental
resources such as water resources. Theoretically, economic value of the environmental
resources such as water relates only to the contribution it makes to human welfare and is
measured in terms of each individuals own assessment of his or her well-being. In other words,
economic value refers not only to people actually pay, but also it includes what people are
willing to pay. The determination of the people’s willingness to pay requires the development
of quantitative economic models and application of econometric methods to these models using
economic data. The theory for generating the economic data involves the application of
contingent valuation method. The purpose of non-market valuation is to understand the
wellbeing of people by looking at the economic value the society is willing to pay to avoid the
loss.

The techniques also help the policy makers to understand the economic consequences of the
mismanagement of natural environmental resources such as water and also to find ways to
incorporate these natural environmental resources into cost-benefit analysis of public policy
(Boyer and Polasky, 2004). For instance, the increased threat of water resources degradation
and depletion in the world dictates the need of accurate valuation of the resources. A
comprehensive cost-benefit analysis of policy can bring the true picture of the environmental
resources such as water that reflect the total cost and benefits of the policy to society. The non-
market valuation techniques play a significant role by providing a monetary value estimate of
environmental goods and services such as water resources which would otherwise be given a
zero value if the normal market system was used (Ndebele, 2009).

11
The need for non-market valuation arose as far back as the 1960s. For instance, in the United
Kingdom, the 1995 Environmental Act established the Environmental Agency (EA) which was
mandated to take into account environmental costs and benefits arising from its policies
(Bateman, Langford, Nishikawa and Lake, 2000). In New Zealand covering the period 1974 to
2005, the 1991 Resource Management Act (RMA) transformed non-market valuation
applications ‘’from mainly an academic exercise, into a government decision support tool for
policy decision making.’’ Unfortunately, non-market economic valuation techniques are less
applied in most developing countries such as Malawi. In Malawi, there are few substantial
published and unpublished reports on economic valuations of wetlands using non-market
valuation techniques. For instance, Zuze (2013) measured the economic value of wetland
ecosystem services in Lake Chiuta. Therefore, when natural environmental resources such as
water resources which cannot be traded in markets are seriously affected by anthropogenic
activities and environmental changes, non-market valuation becomes necessary.

2.4 Economic valuation methods

Water resources are essential to human life and are generally public goods. However, as
observed elsewhere, there is no relative market that expresses these values (Robert, et al.,
1997). Estimating the non- use values of public attributes requires a non-market valuation
method (Tao, Yan and Zhan, 2012). Currently a number of techniques are available for valuing
environmental goods or non-market goods in general (Ward, 2007). These techniques can be
classified into two groups; direct and indirect techniques. Direct techniques also known as
revealed preference methods such as the Travel Cost Method (TCM), Hedonic Pricing Method
(HPM) and Advertising Behaviour (AB); whilst the indirect methods also known as Stated
Preference (SP) methods are; Contingent Valuation Method (CVM), Conjoint Analysis (CA),
Choice Experiments, Choice Ranking and Contingent rating (Madureira, Rambonilaza and
Karpinski, 2007).

2.4.1 Hedonic pricing method

From available evidence, hedonic pricing econometric method has been applied in economic
studies since far back to 1970s. For instance, in 1973, Darling (1973) used an econometric
approach (hedonic Pricing) in measuring benefit generated by urban water tanks. In his study,
willingness to pay (WTP) questionnaire was used to collect the economic data for the study.
Hedonic pricing method as described by Ndebele (2009) is based on the idea that market goods
are often traded at prices in which amenities are internalised. This method assumes that a

12
difference in environmental quality can be valued through property prices. The method assesses
the differentials in property prices and wages between locations, and isolates the proportion of
this difference that can be attributed to the existence or quality of the goods and services
afforded by wetland systems. The method requires vigilant design and considerable statistical
analysis and expertise to separate the environmental variable from the other determinants of
property prices. For example, the price of a house in quiet and beautiful surroundings is likely
to be higher than the price of the same kind of house next to a smelly factory. The hedonic
pricing method starts with a regression of house prices (or wages) against all their valuable
characteristics which leads to a hedonic price function of the following shape: Value (house) =
F (architecture, contents, amenities, local taxes, noxious facilities and among other factors).
From this function, the willingness to pay for a marginal change in each of these explaining
variables is calculated.

However, the validity of the hedonic pricing method may be questionable because the shape of
the hedonic price function is not known (Stynes, 1990). It is also possible that there are several
amenities that influence the price of a house in opposite direction. Since the number of
explaining variables can be numerous, one runs the risk of not including an important variable
or encountering multi-collinearity and thus drawing false conclusions about the value of an
amenity. Therefore, hedonic pricing function was not developed to determine the total value of
nature, but to determine the value of amenities only. This means that the method cannot be
used to determine non-use values of nature.

2.4.2 Travel cost method

The revealed non-valuation economic technique that have received attention in Australasian
context has been travel cost method (Bennett, Australasian enviromental
economics:contributions, conflicts and 'cop-outs'*, 2005). Beal in 1995 used travel cost method
in economic valuation of Carnarvon Gorge National Park in Australia. Similarly, Common
(1999) used travel cost method in empirical investigation of Randall’s difficulty. According to
Stynes (1990), travel cost method relies on the assumption that people make repeated trips to
recreational sites until the marginal utility derived from a trip equals the marginal costs of a
trip. The marginal costs are travel costs in terms of time cost and transportation cost. These
travel costs can be regarded as a directly revealed preference for recreation and an indirectly
revealed preference for nature.

13
The travel cost method assumes that the demand for trips to a specific site is dependent on
travel costs, income, characteristics of the site, prices of substitutes, etc. (Stynes, 1990). Travel
costs are, however, related to distance. In order to determine the willingness to pay of visitors
from various distances, distance circles are drawn in the service area of a site. However, the
validity of travel cost method can be doubted because it is unclear whether the method actually
measures preference for nature. People might not have been aware of the total pleasure or costs
before they decided to go on a trip. The data requirements of travel cost method are rather large,
since one has to interview visitors of sites to determine their travel costs. One also has to
determine the percentages of subpopulations within the service area of a site that will visit the
site.

2.4.3 Contingent valuation method

Contingent valuation method is a survey method in which respondents are asked how much
they are willing to pay for the use or conservation of natural goods (Brouwer and Spaninks,
1997). Their stated preferences are assumed to be contingent upon the alternative goods that
are offered in a ‘hypothetical market’. Essential elements of the survey are: description of the
natural good that is to be valued, description of the payment vehicle and description of the
hypothetical market. Bennett (1984) was very supportive of the use of contingent valuation
techniques and used the technique in valuation of the existence benefits of preserved natural
areas in Australia. Similarly, Sinden (1988) in empirical tests of hypothetical bias in
consumers’ surplus surveys conducted in Australia supported the use of contingent valuation
technique.

However, Bennett and Carter (1993) were more circumspect in their conclusions following
their analysis of contingent valuation data collected for the forest of South-east Australia.
(Blamey, Common and Quiggin, 1995) were also critcal of the contingent valuation technique
and argued that respondents to contingent valuation questions were likely to act as ‘citizen’
rather than consumers and that this voided the use of contingent valuation-derived values.
However, Rolfe and Bennett (1996) disputed the distinction made betweeen citizen and
consumer viewpoints. Later study by Curtis and McConnell (2002) revisited the issue by
presenting emperical evidence to dispute Blamey et al. hypothesis.

14
Earlier, Mitchell and Carson, ( 1989) noted that contingent valuation method is regarded as one
of the most promising methods for valuing public goods such as water. Robert, et al.(1997)
noted that the method has made a significant contribution to the field by demonstrating that an
explicit link between non-market goods and market prices is unnecessary. Earlier, Robert, et
al. (1997) conducted an economic valuation of forest ecosystem services using contingent
valuation method. Recently, Tambor, et al.(2014) used contingent valuation questionnaire to
analyse the willingness to pay for publicly financed health care services in Central and Eastern
Europe. Marella and Raga, (2014) also used Contingent Valuation Method in the assessment
of a landfill mining project in Italy. Therefore, contingent valuation method is highly suitable
for researching households’ willingness to pay and the level of compensation in the study.

2.5 Econometric models

Methodically, previous studies have mainly used the logit, tobit and multiple linear regression
models to analyse respondents’ willingness to pay for ecological compensation. For instance,
some studies have investigated factors affecting the ecological compensation paid by farmers
in the Poyang Lake area located in Jiangxi Province, China (Jiang and Wen, 2011), while others
have examined these factors for paddy farmers in the Shanxi Crested Ibis National Nature
Reserve located in Shaanxi Province, China (Wang, Cui and Mao, 2012). Although both the
logistic model and the linear probability model depict the probability of belonging to a category
as a function of the independent variables, the linear probability model has some disadvantages
when compared to the logistic model. Maddala (1983) pointed out that in the logistic regression
model, the predicted probability of belonging to a category is bounded between 0 and 1 while
in the linear probability model this predicted probability could be greater than 1 and less than
0.

Moreover, logistic models compel the disturbance terms to be homoscedastic because the forms
of probability functions depend on the distribution of the difference between the error terms
associated with one particular choice and another (Gujarati, 2004). Usually a choice has to be
made between logit and probit, however, the statistical similarities between the logit and probit
models make such a choice difficult. Although in practice, there are no strong reasons for
choosing one model over the other, for this study, a binary logistic regression model was used.
The binary logistic regression model was used because of its appropriateness in predicting the
probability of occurrence of an event by fitting data to a logit function (Gujarati, 2004). Binary
logistic regression model is well suited for describing and testing hypotheses about

15
relationships between a dichotomous categorical outcome variable and one or more categorical
predictor variables (Maddala, 1983).

16
 CHAPTER III

MATERIALS AND METHODS

3.1 Study area

3.1.1 Geographical location of Nkhotakota district in Malawi

Nkhotakota district is one of the nine districts in the central region of the Republic of Malawi
(refer to Figure 3.2).

Figure 3. 2 Map of Malawi showing the Location of Nkhotakota district

17
It is located on the west coast of Lake Malawi, the third largest lake in Africa famous for
delicious Chambo fish. Nkhotakota district borders Nkhata Bay District to the North, Mzimba
District to the North West, Kasungu District to the West, Ntchisi District to the South West
and Salima District to the South. It also shares an international boundary with the Republic of
Mozambique to the East. The district is 200 kilometres North West of Lilongwe, the capital
city of Malawi and 358km from Blantyre, the main commercial and financial city and 240 km
from Mzuzu city.

3.1.2 Geographical location of Chia lagoon in Nkhotakota district

Chia lagoon lies between latitudes 13o0’ and 13o30’S, and longitudes 33o50’ and 42o20’E part
of Nkhotakota District. (Refer to Figure 3.3).

Figure 3. 3 Geographical location of Chia lagoon in Nkhotakota District

18
Banderson, et al. (2008) observed that part of Chia lagoon upland areas in Ntchisi district are
not economically productive. The areas are characterized by forest reserve and Nkhotakota
Wild Life Reserve. On the other hand, the lowland plain areas in part of Nkhotakota district
are intensively consisted of cultivated areas of maize, cassava, groundnuts and paddy rice. Chia
Lagoon is located in the lowland plain of the watershed in Nkhotakota district and it
significantly contributes fishery resources for communities living around its borders.

3.1.3 Geographical and ecological characteristics of Chia lagoon

Figure 3.4 shows the geographical and ecological characteristics of Chia lagoon watershed.

Figure 3. 4 Geographical and ecological characteristics of Chia lagoon

(Sourced from Banderson, et al., 2008)

Chia lagoon is the largest in Malawi with a watershed covering a total area of 989 km2 and a
water body surface area of 17 km2 (Banderson, et al., 2008). The lagoon is fed by Lifuliza,

19
Likoa and Bambara river systems which originate from the Ntchisi hills through deeply incised
gorges and valleys before winding through the lowland plains and entering the lagoon. Chia
lagoon watershed has vast natural resources vital to over 55000 human inhabitants. The uplands
are characterized by Brachystegia julbernadia savannah and woodland. The lagoon’s fringes
are heavily colonized by marsh reeds (Phragmites spp.) and shrubs that thrive under
waterlogged conditions (e.g. Aeschynomene, Mimosa and Sesbania spp.

3.2 The sample and sampling procedure

The study used research assistants in the data collection process. The research assistants
selected were those with prior knowledge of the study area, and were able to speak both English
and Chichewa. Six research assistants from Nkhotakota District Fisheries Office were
identified and recruited for data collection. These research assistants were those who previously
worked in the study area as fisheries field officers and all had certificates in Fisheries
Management from Malawi College of Fisheries. The respondents for the study were obtained
by employing stratified random sampling. Stratified random sampling was used due to the fact
that the composition of the population in the study area was heterogeneous, where certain
homogeneity, or similar, sub-populations could be isolated (strata). The villages were stratified
into three strata according to their degree of proximity to Chia lagoon. From each of the
stratum, 3 villages were randomly picked and their households grouped to form a household
stratum. Data was collected for a period of one month.

3.2.1 Determination of sample size

To calculate the sample size for the study, the following formula was used (Biau, Kemeis and
Porcher, 2008):
𝐳 𝟐
𝐧𝐫 = 𝐏(𝟏 − 𝐩) (𝐞) …………………………………………………………………............1

where n= sample size, z = value from the standard normal distribution reflecting the confidence
level (z=1.96 for 95% confidence) of unknown population proportion (p). Since the proportion
of the population was not known, p=0.5 was used which assumes maximum heterogeneity (i.e.
a 50/50 split). In order to have a reasonable sample size for easy handling, 10% margin of error
was used. The calculated sample size was 96. However, the sample size was increased to 101
to ensure that the precision of an estimation corresponded to the width of the confidence
interval of the population mean. According to Biau, Kemeis and Porcher (2008), the larger the
tested sample size is, the better the precision.

20
3.2.2 Data validity and reliability
The study was checked for both reliability and validity in a number of areas. For instance, some
respondents were too old such that it could be difficult for them to remember some figures
especially on crop production (crop inputs and sales) and livestock production (livestock
management costs). To correct this problem, the questionnaire was designed in such a way that
it captured recent information from the respondents which was easy for them to recall. Again,
the questionnaire was also designed to capture information which was based on their personal
experience in the study area. Additionally, more recent information was also collected from
their spouses and children. Secondly, some respondents could not clearly understand the
purpose of the study and deliberately underestimated their production and income levels. This
problem was corrected by explaining the study purpose prior to and throughout the interview
session.

Validity problems developed from asking unclear questions by the research assistants.
Therefore, the research assistants were first fully trained to make sure that they fully understood
the questions that were both in English and Chichewa. Pretesting of the questionnaire was done
outside the study area. This was done to further make sure that the research assistants fully
understood the questions. Although the research assistants were trained, it was also possible
that presentation of the questions and probe was different from one research assistant to the
other resulting in respondents giving wrong answers. Therefore, the assistants were encouraged
to write down respondents’ responses in whole without leaving out information. By reviewing
the written responses, it was possible to check if the questions were presented properly.

3.2.3 Ethical issues

In this study, some considerations were made on ethical issues especially those that likely arose
in the course of the data collection. For instance, research participants were informed the
purpose of the study prior to their participation. This enabled them to make well informed
decisions on whether to take part in the study or not. On the same note, participants were
assured of confidentiality of information they provided. Furthermore, questionnaire was
designed to have minimal inconvenience to the participants.

21
3.2.4 Data collection techniques for objective 1
To answer the specific objective 1, (Estimate the total economic value accruing from water
resources at Chia lagoon), a structured questionnaire and direct observations were used. Semi-
structured or interactive interviews with the communities were conducted to collect the data,
mainly relating to income generated from economic activities taking place around the lagoon.
Qualitative data collection techniques were also used to understand the local realities on the
ground (Kopa, 2007).

3.2.4.1 Statistical models for objective 1

Gross output value was used to determine the economic value derived from the lagoon water
resources. Gross output value is an economic technique used to measure economic activities
taking place in the natural environment. Gross output value technique is mostly preferred
because of its ability to estimate livelihood status of households accurately (Lwesya, 2004).
The analysis was made in terms of the value of entitlements that households could save,
consume, invest or exchange into other goods. The following indicators were used in estimation
of GOV: Crop production given as the market value of total farm produce; fish catches given
as total annual biomass catch and average beach price (MK/kg), livestock production calculated
from market value of the stock, off-farm and non-farm activities valued as gross wages; self-
employment calculated as gross earnings; remittances and rental incomes and other incomes
valued accordingly.

3.2.4.1.1 Model to determine income generated from agricultural activities

Irrigated and rain-fed crop incomes (Total crop income) was calculated as follows:

𝐓𝐋𝐢&𝐫 = ∑𝐧𝐢=𝟏[𝐂𝐢 𝐏𝐢 − (𝐊 𝐢 )]…………………………………………………………..……. (2)

where TLi&r is Total crop income (irrigated and or rain-fed crop incomes), Ci is Yield of crop
i, Pi is Market price of crops and Ki is Production costs of crop i
Livestock income, which included all domestic animals, was calculated as follows;

𝐓𝐑 𝐋 = ∑𝐧𝐢=𝟏[(𝐍𝐢 𝐏𝐢 ) − (𝐊 𝐢 )]………………………………………………….….………......(3)

where TRl is Total livestock income, Ni is Number of livestock in category I, Pi is Price of

each livestock in category i and Ki is Cash costs of keeping livestock i, i.e. management costs
like feeding, vaccination and drugs.

22
3.2.5 Data collection techniques for objective 2
The specific objective 2 (Estimate the amount of money households are willing to pay in order
to improve the status of water resources at Chia lagoon) was answered by firstly analysing the
dynamics of water quality and quantity at Chia lagoon for the past 10 years. Oral interviews
with local communities around the lagoon were conducted. Enumerators interviewed the
household head or second household head in the absence of the head to explain issues
surrounding the status of water quality and quantity at the lagoon. Interviews with key
informants such as local leaders, government and NGOs staff working in the study area were
also conducted to capture their general impression on dynamics of water quality and quantity
at the lagoon over the past 10 years. The key informants were further interviewed to explain
issues which the study team needed clarification (Kopa, 2007). Field observation was also
conducted to capture the general depiction of the current status of water resources at the lagoon
(Makwinja et al. 2014). Secondary and abstract data was obtained from relevant literature and
government departments.

Secondly, to determine the willingness of the household to pay towards the conservation of
water resources at the lagoon, open-ended willingness to pay questionnaire was used. Open-
ended questionnaire was preferred because respondents are not restricted by defined values as
in binary choice or closed-ended questions (O’Conor, Johannesson and Johanesson, 1999).
Again, responses to open-ended questionnaires have ability to minimize standard error and
lowered estimates of central tendency (Boyle, et al., 1996) apart from preventing bias
(O’Conor, Johannesson and Johanesson, 1999). Questions were explained more clearly using
face-to-face interviews to minimise missing responses. Realistic payment vehicle was selected
(how respondents pay the willingness amount) (Lee and Han, 2002). Strategic and instrument
biases were addressed by informing respondents that no one would receive any inducements in
either cash or kind. The hypothetical bias was handled by maintaining good public relations.

3.2.5.1 Statistical models used to answer objective two

The mean willingness to pay was calculated by summing up household maximum willingness
to pay amount and dividing the sum by the total number of respondents willing to pay. The
following formula was used to calculate the mean:
∑𝐧
𝐢𝐉=𝟏 𝐖𝐓𝐏𝐢
𝐌𝐞𝐚𝐧 𝐖𝐓𝐏 = …………………………………………………………..…..…… (4)
𝐍

23
where i stands for the amount household, j is willing to pay and n stands for the sample size of
households whose WTP is positive.

3.2.5.2 The Gini coefficient

The Gini coefficient was used to assess whether income generated from various economic
activities taking place around the lagoon influence the income inequality among the
households. The results from Gini coefficient was further used to assess how the distribution
of income generated from various economic activities done by the members of the communities
around the lagoon and the income variation in particular, affects willingness to pay (WTP) for
Chia lagoon water resources conservation program. The income distribution of the household
was estimated by:
𝟏 𝐦
𝐆 = 𝟐𝛍𝐧𝟐 ∑𝐦
𝐣=𝟏 ∑𝐤=𝟏 𝐧𝐣 𝐧𝐤 |𝐘𝐣 − 𝐘𝐤 | ……………………..………………………….…….... (5)

where 𝜇 =mean income, 𝑌𝑗 and 𝑌𝑘 individual j and k income, 𝑛𝑗 𝑎𝑛𝑑 𝑛𝑘 individual j and k and
n, the total individuals or households. The value ranges between 0 and 1. A measure of 1 mean
that the income generating activity has significant influence on household’s income distribution
and a measure of 0 means that the income generating activity does not influence the income
distribution.

3.2.5.3 Economic values of lagoon water resources

Gross output value and gross margin analysis were used to express the monetary value of goods
and services provided by water resources at the lagoon. The monetary value was expressed in
Malawi kwacha and then were converted into US Dollars (US$) based on average exchange
rate of MK733.5=1US$ as of December, 2016.

3.2.6 Data collection techniques for objectives 3

To answer objective 3 (Analyse factors that influence the willingness to pay in order to improve
the status of water resources at Chia lagoon), a questionnaire similar to the one described in
objective 2 was used. Semi-structured or interactive interviews with the communities were
conducted to collect the data mainly related to communities’ judgment, priorities, attitude and
perception towards water resources services at the lagoon.

24
3.2.6.1 Statistical models for objectives 3

3.2.6.1.1 Binary logistic regression model

Following Gujarati, (1999), binary logistic regression model characterizing the factors
affecting the households’ willingness to pay towards water resources conservation is specified
as:
𝟏
𝐏𝐢 = 𝐅(𝛅 + 𝛃𝐗𝐢)= 𝟏+𝛅−(𝛅+𝛃𝐗𝐢) ……………………….……………………………….….. (6)

where subscript i denotes the i-th observation in the sample, Pi is the probability that an
individual would make a certain choice given Xi, e is the base of natural logarithms and
approximately equal to 2.718, Xi is a vector of exogenous variables, α and β are parameters of
the model and (β1, β2, βk) are the coefficients associated with each explanatory variable.
The above function can be rewritten as:
𝐩
𝐈𝐢 = 𝐥𝐧 ⌈(𝟏−𝐏𝐢)⌉= β0 + β1X1i + β2X2i........ βkXni +ei…………………………………….…. (7)

It should be noted that the estimated coefficients do not directly indicate the effect of change
in the corresponding explanatory variables on probability (P) of the outcome occurring. Rather
the coefficients reflect the effect of individual explanatory variables on its log of odds.
Where the expression for log of odds is given as:
𝐩
𝐥𝐧 ⌈(𝟏−𝐩)⌉………………………………………………………………...……………….... (8)

The positive coefficient means that the log of odds increases as the corresponding independent
variable increases Neupane, Sharma and Thapa (2002). The coefficients in the logistic
regression model are estimated using the maximum likelihood estimation method. For this
study, the empirical model is specified as:
Y=β0 + β1X1 + β2X2 + β3X3......... βiXi+ ei……………………………………………………………………….…… (9)
Where Y= dependent variable, β0 is the intercept and β1, β2, β3…, βi, are the regression
coefficients of X1, X2, X3…, Xi respectively.

3.2.6.1.2 Evaluation of the logit regression model

A bivariate (Chi-squared) analysis was used to determine how each of the explanatory variables
relates to the dependant variable. This analysis was also carried out to find out if the influence
of each of the variables was significant. According to Guffey (2012), the goodness of fit has
ability to assess how well a given probability distribution fits the data as well as how a statistical
regression model fits the data. Therefore, Hosmer-Lemeshow goodness-of-fit test was used to

25
assess whether the number of expected events from the logistic regression model reflected the
number of observed events in the data (Hosmer and Lemeshow, 1980).

According to the Hosmer and Lemeshow, (1980), the logistic model was first tested for its
predictive power by using a calibration statistic. Calibration statistic is based on the Pearson χ2
statistic which evaluates the model fit by comparing observed and expected outcomes within
K groups defined based on ranking the predicted probabilities (Maddala, 1983). The data were
ranked according to the predicted probability of the outcome from the model being evaluated.
Data were commonly grouped into deciles. Within each group the expected number of
outcomes, sum of predicted probabilities was compared to the observed number of outcomes.
This was evaluated by the following model (Guffey, 2012):

𝟐
̂ = ∑𝐤𝐢=𝟏 = (𝐎𝐢 −𝐧𝐢𝐩𝐢) ∙ ~𝐱 𝟐 𝐤−𝟐 ……………………………..…………………………….. (10)
𝐇𝐋 𝐧 𝐩 (𝟏−𝐩 )
𝐢 𝐢 𝐢

where 𝑂𝑖 is the number of observed events in group i, ni is the number of observation in group
i, pi is the average predicted probability in group i, and k is the number of groups.

3.2.7 Statistical Analysis

Descriptive statistics such as means, standard deviations and percentages of variables such as
crop incomes, crop input costs, livestock incomes, household incomes, and gross output values,
fish output and others were done in Excel version 2013. Inferential analysis was done according
to the procedures described by George and Mallery (2016) in IBM-SPSS statistics version 20
(IBM Corp, 2011).

26
 CHAPTER IV

RESULTS AND DISCUSSION

4.1 Introduction
This chapter presents the major findings and a discussion of the research. The results which
are linked to the first objective are presented in Section 4.2 of this chapter, the findings linked
to the second objective are presented in Section 4.3 and finally the findings for the third
objective are presented in section 4.4.

4.2 Estimation of total economic value

This section explains the significance of water resources at Chia lagoon and provides estimates
of the total economic value (both direct and indirect) contributed by water resources at the
lagoon to the communities. Direct economic value estimates the production and consumption
of goods (primary and secondary) that can be traded (so the value becomes visible). Examples
are crops, fish, firewood and water. Indirect economic value is the benefit derived from
ecosystem functions and these are usually not traded so the value becomes uncertain. Examples
are flood control, storm protection, soil conservation; value related to income from tourism,
water as a transport route and among others. Sub section 4.2.1 introduced the general overview
of the communities’ socio-economic dependence on Chia lagoon water resources.

4.2.1 Analysis of socio-economic dependence on Chia lagoon water resources

Table 4.1 shows the results from descriptive analysis of socio-economic dependence on Chia
lagoon water resources.

Table 4. 1: Analysis of Socio - economic dependence on Chia lagoon water resources

Factor Category Frequency Percentage
Household depends on lagoon Depend on lagoon water 63 63.4
waters in income generating resources
activities
Do no depend on water 37 36.6
resources from the lagoon
Total 101 100
Access to natural resources Have excellent access to 38 37.1
from the lagoon natural resources
Have good access to natural 54 53.5
resources
Do not have access to natural 9 8.9
resources
Total 101 100

27
As seen from Table 4.1, the results from descriptive analysis showed that about 63.4% of the
respondents depend on water resources from the lagoon in their income generating activities.
The significance of water resources in the lagoon has been previously reported by
Venkatachalam and Jayanthi, (2016) at Pallikaranai Marsh in Chennai City, India.
Venkatachalam and Jayanthi observed that water resources in the lagoon/wetlands generate
multiple ecosystem services which are translated into the production and consumption fuctions
of households. Millennium Ecosystem Assessment (2005) report also added that groundwater
recharged by wetlands/lagoons plays an important role in supplying freshwater to human
beings, with an estimated 1.5 to 3 billion people directly dependent on it. It was very interesting
to note that majority of the households who are highly dependent on water resources from Chia
lagoon are found in its periphery. According to Venkatachalam and Jayanthi (2016), the
majority of the households are found in the lagoon /wetlands periphery because of the presence
of aesthetic, educational, cultural, religious, recreational and tourism benefits. Turpie, et al.
(2006) on the economic use value of the Okavango delta, also noted that natural resources’
products as the result of the existence of water resources in the wetlands or reservoirs form a
critical part of the local communities’ livelihood. As seen from Figure 4.5, Chia lagoon is
perceived as the main source of livelihoods through various socio-economic activities such as
agriculture, fisheries, informal and formal businesses taking place around it which significantly
contribute to poverty reduction as well as households’ sustainable economic development.

Figure 4. 5 : Farming, fishing and petty trade at Chia lagoon

28
In Kenya, Kirsten, (2005) noted that a significant portion of human populations are attracted
by the Nyando wetland due to its socio-economic importance. He further observed that a
significant proportion of households around Nyando wetland survive by exploiting their
resources from the wetland. In other words, economic and financial motives had driven a
significant proportion of population to live in the wetland periphery. Similar observation was
made at Chia lagoon where the majority of the households living in its periphery perceived the
lagoon as the main source of livelihood.

Evidently, the communities around the lagoon engage in various socio-economic activities
such as farming and fishing. As previously indicated by Zimba and Kaunda (1999) in a study
report for Lake Chilwa basin, most of the basin’s population (90 %) relies on fishing, farming
and petty trading on fish and farm products for their livelihoods. The study evidenced that the
majority (53.5 %) of the households have good access to natural resources which include fish
and other aquatic organisms from the lagoon. Nise (2005) also had similar observation in the
Pacific Island communities. Again, water resources act as habitat for various aquatic organisms
such as fish which are translated into economic value through income generated from fishing
activities.

Makwinja et al. (2014) had similar observation in the deep pools of Likangala River, Zomba,
Malawi. Makwinja et al. noted that commercial important fish species such as Barbus
paludinosus, Barbus trimaculatus, Clarias gariepinus, Tilapia rendalli, and Oreochromis
shiranus chilwae locally known as Matemba, Mlamba, Chilunguni, and Makumba spawn and
grow in the deep pools of the river. Similarly, the present study revealed that the commercial
dominant fish species such as Oreochromis karongae, Oreochromis lidole and Oreochromis
squamipinnis, collectively known as Chambo, Oreochromis shiranus (Makumba), Tilapia
rendalli (Nkhututu), Haplochromis spp (Kambuzi), Capadichromis spp (Utaka),
Tramitichromis spp (Chisawasawa), Bagrus meridionalis (Kampango), Clarious gariepinus
(Mlamba), Opsaridium microcephalum (Sanjika), Rhaphochromis spp (Mcheni), Bucchromis
spp (Mbaba), Opsaridium microlepis (Mpasa), Burbus spp (Matemba) and others spawn and
commonly found at Chia lagoon.

29
 Percentage of main economic Household's main occupation
actvities Farmers
Bussiness 41.6
17.8 Fisher men 19.8
6.9 House wife
Farming Business
12.9 man/woman
Grazing 32.7 Civil servant 7.9 10.9
8.9 Casual labour

40.6 Fishing

Figure 4. 6: Percentage of main economic activities and household’s main occupation

Figure 4.6 shows the details of socio-economic activities taking place at Chia lagoon waters
and household’s main occupation. As seen from Figure 4.7, it is evident that higher income
generated by the households around the lagoon comes from fishing (40.6%).

Figure 4. 7 :Fishing activities at Chia lagoon

Wedathantrige, Amarasiri and Fernando (2013) had similar observation. Wedathantrige et al.
observed that of the 3,310 fishers operating in the Negombo lagoon in South-West Sri Lanka,
2,586 or 78 percent are full-time fishers while 724 or 22 percent are part-fishers who move into
the lagoon only during the south west monsoon periods when sea fishing becomes difficult,
because of cross currents and high waves. In Malawi, Jamu et al. (2011) in the study conducted
at Lake Chilwa observed that the Lake Chilwa fishery is very important to Malawi’s economy
and contributes on average around 15,000 MTyear-1. The study further revealed that large
number of fishermen present at Chia lagoon is due to the vast water resources which act as a
habitat for various fish species. Similar observation was made by (Hirji, Johnson, Maro and
Chiuta, 2002) who went on to report that fishermen are by far most common in wetlands
30
because of the presence of the vast water resources in those places which act as habitat for
diversity of fish species. As previously indicated by FAO (2007) , cultivated area around the
wetlands has more than doubled for the past years to accommodate rapid population growth in
the area. As observed from Figure 4.8, farming is another major activity taking place around
the lagoon and also a major source of income for the communities. It contributes 32.7% of the
income generating activities.

Figure 4. 8 : Rice cultivation at Chia lagoon during the winter season

The study further revealed that households around the lagoon are actively involved in both crop
and livestock farming for subsistence and commercial purpose. The presence of agricultural
activities around the lagoon is a substatential evidence of heavy use of water resources in the
lagoon for both economic and livelihhod activities. The study findings are in line with (Harun,
Muresan, Arion, Dumitras and Lile, 2015) who demonstrated that agricultural water use
accounts for about three quarters of total global consumption in many developing countries
where irrigation represents 90% of the water used. Furthermore, Turpie, et al. (2006) had
similar observation on the Okavango delta and wetlands and went on to report that farmers
living around the wetlands engage in both crop and livestock farming for subsistence and on a
limited scale for commercial purpose. The study further revealed that the majority (48.5%) of
the people around the lagoon have low literacy levels which limit them to look for formal jobs,
hence they rely on the resources from the lagoon for their survival. The study revealed that
about 40.6% of the surveyed households depend on fishing as the main economic activities and
41.6% of the households surveyed were found to be fishermen. Similar observations were made
by Zuze (2013) in the study conducted at Lake Chiuta.

31
4.2.2 Indirect economic value of water resources

4.2.2.1 Ecosystem goods and services provided by water resources at Chia lagoon
The results for water resources services at Chia lagoon are presented in Figure 4. 9 below.

21.8

Habitat for aquatic animals 21.8

Provide Food (fish,birds, fruits,mice,

vegetables etc

Livestock grazing
5.9 Provide raw materails (ropes,grass,
poles, firewood etc

10.9 16.8
Transportation
Nursery ground (fish
biodiversity)

22.8

Figure 4. 9: Water resources services

The study showed that over 21.8% of the respondents observed that the lagoon act as habitat
for various aquatic organisms such as fish. Again, 22.8% of the respondents noted that Chia
lagoon is the breeding and nursery ground for fish. Evidently, Figure 4.10 shows that the
shallow waters of the lagoon act as a breeding and nursery site for various fish species of the
commercial importance. Turner (1996) had similar observation in the shallow waters of Lake
Malawi.

32
Figure 4. 10 : Fish breeding ground at Chia lagoon

Again, the presence of vast body of water connecting to Lake Malawi through Chia river acts
as a transport route for fishers (refer to Figure 4.11). Over 10.9% of the households especially
fishermen move from the lagoon to Lake Malawi using boats. Similar observation was made
by Zuze (2013) in a study of Lake Chiuta’ and it was reported that some households used
boats and canoes for transport to either side of the lake carrying an average of 30 passengers
per trip. Zuze further estimated that the average income per household engaged in water
transport was K3000 ($9) per day.

33
Figure 4. 11 Chia lagoon being used as a transportation route

As observed from Figure 4.12, Chia lagoon further provides green pasture to animals grazing
around the periphery especially during the dry season. Evidently 5.9% of the respondents
observed that the lagoon periphery is used for grazing livestock.

Figure 4. 12: Livestock grazing at Chia lagoon periphery

34
Zuze (2013) had similar observation at Lake Chiuta and reported that during the rainy season,
the communities collect fodder from the wetland for their livestock. The study further
evidenced that over 16.8% of the respondents collect construction materials such as grass, ropes
and poles around the lagoon for house construction. Evidently, over 90% of the houses around
Chia lagoon are grass thatched. The study also revealed that the lagoon waters provide about
21.8% of natural foods such as fish, birds, fruits, vegetables and others to the communities
around. Additionally, the lagoon provides water for both domestic use and irrigated agriculture
as well as for livestock. The surrounding communities again depend on water directly obtained
from the lagoon for domestic use. It was further interesting to note that over 60% of the
households prefer to settle around the lagoon periphery due to its natural amenity. Figure 4.13
shows the natural amenity of water resources at Chia lagoon.

Figure 4. 13 Chia lagoon natural amenities

The scenic view of the water resources, open air, natural flora and fauna of Chia lagoon attract
many households living around. As seen from Figure 4.14, most tourists who travel from
Mzuzu to Blantyre via Lakeshore road (M5) enjoy the scenic view of water resources at the
lagoon which is translated into indirect economic value.

35
Figure 4. 14: Tourists enjoy scenic view at Chia lagoon

4.2.2.2 Cultural and control services provided by water resources at Chia lagoon
Figure 4.15 (a) shows education and cultural services of water resources at Chia lagoon.

Cultural and education services Control services

Education visit (research) Water purification

6.9 6.9
Initiation
Home of 28.7
ancestral spirits
25.7
34.7 Water regulation

Flood control
Religious baptism 67.3

29.7

a b

Figure 4. 15 : Cultural and control Services

The results showed that Chia lagoon has a great cultural significance to communities around.
These cultural benefits include psychosocial. Evidently, over 28.7% of the respondents use the
lagoon to conduct various initiation ceremonies. De Groot, Wilson and Boumans (2002) had
similar observation in wetlands and reported that along with other services, wetlands had great
cultural significance to local people in the vicinity. Furthermore, 29.7% of the Christians

36
around the lagoon use the water for baptism. Zuze (2013) had similar observation at Lake
Chiuta. Furthermore, 34.9% of the respondents believed that the lagoon is the home of ancestral
spirits and hence treat it as a sacred. Similar observation was made by Makwinja et al (2014)
in Likangala river and reported that actually several deep pools downstream of Likangala river
were given special attention and were called sacred places by locals. As observed from Figure
4.16, Chia lagoon also act as an education base for scientific research especially in fisheries
field.

Figure 4. 16 : Researcher collecting data at Chia lagoon

6.9% of the respondents evidenced that the lagoon receives visitors from various research
institutions who come to conduct studies. Figure 4.15(b) shows the control services of water
resources at Chia lagoon. Over 67.3% of the respondents observed that Chia lagoon regulates
floods. The lagoon regulates the flooded water drained by inflow streams that flow into it
thereby reducing the risk of floods in the surrounding households and crops. 25.7% of the
respondents further observed that the lagoon returns water during the dry season for winter
farming. Similar observation was made by Thomson (2006) who further highlighted that the
sustainability of agricultural production depends on the availability of water in the flood plain.
Again, 6.9% of the respondents observed that the lagoon purify water by allowing the
sediments to settle down into the bottom of the lagoon.

37
2.2.3 Direct economic value accruing from the water resources at Chia lagoon

2.2.3.1 Livestock production

Figure 4.17 shows the details of the livestock raised by the households around the lagoon.

wild animals 3

24.8
22.8
Pigs
Poultry

cattle 12.9 Goat

36.6

Figure 4. 17 Number of livestock per household

The major animal types raised by the households around Chia lagoon are cattle, goats, sheep
and poultry. About 22.8% of animals raised by the households are poultry while goats 36.6%,
24.8% are pigs and 12.9% are cattle. Other animals such as birds are hunted by the communities
from the lagoon periphery and this consists of 3%. However, the reported numbers of animals
by households around the lagoon were likely underestimated because some households were
generally reluctant to tell the size of their herds as they represented their capital. So, the actual
number of livestock might actually be more than the survey result.

2.2.3.2 Livestock economic value

The Table 4.2 shows the details of animals raised by the households around Chia lagoon.
Table 4. 2 Number of animals per households
Animals Minimum Maximum Sum Average
Other wild animals (birds etc.) 0.00 15 195 6
Number of pigs 0.00 9 1156 4
Poultry (number) 0.00 60 8725 10
Goat (Number) 0.00 40 2214 3
Cattle (number) 0.00 18 1117 2

The results showed that the maximum number of livestock raised per household was 9 for pigs,
60 for poultry, 40 for goats and 18 for cattle. The households also hunt animals such as wild
birds and others from the lagoon. The study revealed that the maximum number of animals
caught annually per household was 15. The study further revealed that the annual average

38
number of animals per surveyed household was 4 for pigs, 10 for poultry, 3 for goats and 2 for
cattle. The study further revealed that the average number of animals from hunting was 6.
Table 4. 3 Annual revenue from livestock (MK)
Animals Minimum (MK) Maximum Sum (MK) Mean (MK)
(MK)
Other animals 0.00 12,469.5 77,751 1,078.245
Pigs 0.00 187,042.5 2,934,000 40,753.26
Poultry 0.00 173,106 2,103,678 29,215.305
Goat 0.00 619,074 3,311,752.5 45,997.785
Cattle 0.00 1,485,337.5 9,657,994.5 134,142.48
1US$= MK733.5 as of December, 2016

Translating the livestock production into monetary value (refer to Table 4.3), the study revealed
that each surveyed household could generate maximum annual revenue of MK1,485,337.5
(US$ 2025.00) from cattle, MK619,074 (US$ 844.00) from goat, MK 173,106 (US$ 236.00)
from poultry, MK187,042.5 (US$255.00) from pigs and MK12469.5 (US$ 17.00) from wild
animals. Table 4.3 shows the details of the livestock economic value. On average, the study
revealed that the annual revenue (MK) per household generated from pigs was MK40753.26
(US$55.56), from poultry MK29,215.31 (US$39.83), from goats MK45,997.79 (US$ 62.71),
from cattle MK 134,142.48 (US$ 182.88) and from hunting birds and other wild animals
MK1078.25 (US$ 1.47).

2.2.3.3 Crop economic value

The major crops grown around Chia lagoon are maize, cassava, rice and vegetables. About
20% of crops grown by the households are maize while cassava 29%, 33% is rice and 18% are
vegetables. Figure 4.17 shows the details of the crops grown by the households.

Maize
vagetables 18 20

Rice Cassava

33
29

Figure 4. 18 Types of crops grown by the communities around Chia lagoon

39
 The study further revealed that the maximum annual number of bags (50kg) harvested by the
household from farming was 70 for maize, 100 for rice, 50 for cassava and 15 buckets (20
litres) for vegetables. Table 4.4 shows the details of yields from crop production.
Table 4. 4: Yield from crop production
Crop(kg) Minimum Maximum Sum Mean
Maize (50kg/bag) 1 70 1042 14
Rice (50kg/bag) 3 100 1497 21
Cassava (50kg) 1 50 184 17
vegetable (20 litres 0 15 155 2
bucket)

On average, the annual yield of various crops per household around the lagoon was 14 bags
(50kg) for maize, 21 bags (50kg) for rice, 17 bags (50kg) for cassava and 2 buckets for
vegetables. Table 4.5 shows the details of the economic value of various crops.
Table 4. 5: Income (MK) generated from farming
Revenue generated Minimum Maximum Sum Mean
from crop
Maize yield 12,469.5 866,997 12,903,732 179,216.055
Rice yield 43,276.5 1,444,261.5 21,623,580 300,329.24
Cassava 1549.84 515,650.5 1,896,831 26,347.32
Vegetables 0.00 30,807 322,006.5 4,474.35
1US$= MK733.5 as of December, 2016
Translating the crop harvest into economic value, the study revealed that each surveyed
household could generate maximum annual revenue of MK866,997 (US$ 1182) from maize,
MK 144,261.5 (US$ 1969) from rice, MK 515,650.5 (US$ 703) from cassava and MK 30,807
(US$ 42) from vegetables. On average, the study revealed that the average annual revenue
(MK) per household generated from crops was MK 179,216.06 (US$ 244.33) for maize, MK
300,329.24 (US$ 409.44) for rice, from cassava MK 26,347.32 (US$ 35.95) and from
vegetables MK 4474.35 (US$ 10.3).

2.2.3.4 Income generated from off farm activities

Table 4.6 shows the details of the income generated from various off farm activities.
Table 4. 6: Income (MK) from off farm activities
Income from off farm Minimum Maximum sum Mean
activities
Petty trade 733.5 168,705 618,340.5 97,452.81
Informal or formal trade 2,200.5 509,782.5 918,342 240,617.34
Wages 733.5 100,489.5 385,821 60,528.42
1US$= MK733.5 as of December, 2016

40
People with no skills and no capital participate in various economic activities at the lagoon.
The majority of low income households around the lagoon are involved in petty trade.
According to Little (1999), petty trade involves buying and selling of agricultural, food and
other products such as processed and fresh fish by the road side or market places. In Maputo,
it was observed that more than 50% of households in a sample of 366 households have at least
one member engaged in some form of petty trade and their income from this activity often
exceeds formal wage earnings. Similar observation was reported at Chia lagoon. The study
revealed that the households around the lagoon generate maximum annual revenue of
MK168,705 (US$230) from petty trade, MK 509,782.5 (US$ 695) from formal and informal
businesses such as running a grocery shop and MK100,489.5 (US$137) from wages. The study
further revealed that average annual revenue (MK) per household generated from off farm
activities was MK 97,452.81 (US$ 132. 86) from petty trade, MK 240,617.34 (US$ 328.04)
from formal business and from wages MK 60,528.42 (US$ 82.52).

2.2.3.5 Economic value generated from fisheries resources

Estimates (refer to Table 4.7) revealed that the highest total annual fish catch (48.07 metric
ton) at Chia lagoon was realised in 2011 (Department of Fisheries, 2015). However, the fish
catches have been declining over the years with the lowest being in 2014 which registered 34.5
metric ton.
Table 4. 7: Total annual catch (ton) and revenue (MK)
Year Total catch (ton) Total revenue (MK)
2009. 46.05 28160913.42
2010. 75.68 39367370.43
2011. 48.07 28516792.95
2012. 35.25 19579242.15
2013. 40.5 20342302.2
2014. 34.5 17744978.7
2015. 38.9 22345784.1
(Department of Fisheries, 2015).
The decline in fish catches over the past years could be directly linked to several factors
prominently being the depletion and degradation of water resources in the lagoon as a result of
climate change and anthropogenic activities. On the issue of climate change, (Fujihara, Tanaka
,Watanabe and Nagano, (2008); Matondo, Petera, and Msibi, (2004) and Tate, (2004) observed
serious implications of climate change on water resources in Malawi. Furthermore, Griggs and
Noguer, (2002) observed that the interaction of precipitation with temperatures and
evapotranspiration considerably affects the behaviour of surface water hydrology, such as

41
mean runoff amounts, drought and ultimately, lake levels and river flows which consequently
affected the breeding, survival and growth of fish species such as Chambo leading into
tremendous decline in catches. The fluctuation in fish catches over the past seven years
significantly affected the economic value generated from fisheries. The study revealed that the
highest revenue was generated in 2010 which corresponded to highest annual fish catches. This
was attributed to good annual precipitation in 2009 which induced massive fish breeding in the
lagoon and hence translated into highest fish catches in the following year. The results are
further in line with the finding of Bell, Collie, Jamu, and Banda, (2012) who reported a positive
correlation between Chambo catch and Lake Malawi water level which primarily originated
from rainfall and higher wind velocities.

2.2.3.6 Overall gross output value (GOV)

The study revealed that livestock production at Chia lagoon economically contributed annual
average income of MK42,088.23 (US$57.38) per household while crop production contributed
MK128,362.5 (US$175.00) per household. Similar results were reported by De Groot et al.
(2002) and valued cropping service at US$151/yr. Average annual income per household from
off farm activities was MK132,866 (US$181.14). Cumulatively, Chia lagoon generates an
annual economic value of MK330,687,223.1 (US$450,834.66) from livestock, MK1.009
billion (US$ 1,374,975) from crops, MK1.04 billion (US$1, 423,216.98) from off farm
activities and MK352,083,374.1 (US$480,004.6) from fishing. Adekola et al. (2006) also found
out that fishing was the most significant wetland service contributor to household income ($224
per household). The study findings further conform to Millennium Ecosystem Assessment
(MEA 2005) reports. MEA (2005) reports revealed that capture fisheries in coastal waters such
as lagoons alone contribute US$ 34 billion to gross world product annually.

Overall, annual net worth of Chia lagoon is valued at MK2.7 billion (US$3,729,031.24).
Previous studies reported similar findings. For instance, Kumar (2010) estimated economic
contribution of Chilika lagoon in India to be at Rs.200 crore per annum. This implied that in
the absence of Chilika, the society could lose Rs.200 crore worth of direct economic welfare
per annum. In Malawi, IUCN (2002) report found out that the economic value of Lake Chilwa
was US$20.4 million. Similar findings were reported by Schuijt (1999) who estimated that
Lake Chilwa contributes about US$17 million a year. Zuze (2013) further reported that the
economic valuation of ecosystem services goods and services provided by Lake Chiuta in its

42
present condition contribute a total annual economic value of US$17.2 million to the
surrounding communities.

2.3 Economic valuation of the willingness to pay

This section presents the major results linked to the current status of water resources at Chia
lagoon, economic implication of current water quality degradation at Chia lagoon, analysis of
the bid amount of households’ willingness to pay, analysis of the household’s responses
towards varying bid amount, gross margin analysis of the economic value of water resources
and the analysis of income inequality and willingness to pay.

2.3.3 Current status of water resources at Chia lagoon

Although, little information is available on the status of water quality at Chia lagoon, local
perception shows that in the early 1980s, Chia lagoon had clear water resources. However, in
recent times, the quality of water in the lagoon has severely deteriorated. Figure 4.19 shows
some evidence of poor water quality in Chia lagoon in recent times (2016).

Figure 4. 19 Turbid water in Chia lagoon in March and April of 2016

Evidently, (refer to Figure 4.20) high rate (56.4%) of respondents had similar observation and
20.8% even said that the quality of water resources at the lagoon sometimes remain turbid
throughout the year unlike in 10 years ago.

43
 Duration in which water quality remain clear at
Duration in which water quality remain clear Chia lagoon in 10 year ago
at Chia lagoon as of 2016 Less than three moths
More than a month 3.0 1.0
1.0 Within 6 moths Less than 6 moths Not even more than a moth
5.0
Not even 20.8 4.0
more than Less than six moth
6 months Within six More than six
17.8 months
months 31.7
59.4

Less than 6 moths

56.4

Figure 4. 20 Duration of water resources remain clear at the lagoon

It is important to note that with the expansion of human settlements in the lagoon periphery, a
lot of wastewater is directly discharged into the lagoon. Again, with the wide use of fertilizers
and pesticides in the upland areas, water resources at the lagoon is extensively polluted. Figure
4.21, indicates that a large portion (49.5%) of water quality degradation is significantly
contributed by increased agricultural activities in the upland areas followed by household’s
wastes (25.7%), cultivation in the lagoon periphery (19.8%) and animal wastes (5%).

Animal wastes
5
Increased agricultural actvities in the upland

25.7
Household's wastes
49.5

19.8
Other wastes

Figure 4. 21 Major contribution of water quality degradation at Chia lagoon

44
The study findings are in line with FAO (1999) report which evidenced rapid deterioration of
water resources in the downstream of Mainland Southeast Asian rivers as a result of
inappropriate agricultural practices in the upland watersheds. The FAO (1999) report further
highlighted that excessive use of agrochemicals, high demand for irrigation during the dry
season, and cultivation of annual crops without erosion control measures on sloping lands bring
about problems of reliability of water supply, loss of topsoil and contamination of water quality
which affect the downstream users. Figure 4.22 indicates that the majority (82.6%) of the
surveyed households observed that 10 years ago, the water resources at the lagoon was below
group IV which is considered to be better.

Class of water quality in 10 years Current class of water quality

ago Above group V
3.1
Below group IV Within group
4 IV&V 14.3
23.8
Within group V&IV

Above group V
Below group IV
72.3 82.6

Figure 4. 22 Categories of water quality at Chia lagoon

Currently, the majority (72.3%) of the respondents observe that the water resources at the
lagoon is above group V which is considered to be the worst polluted water resources.
According to previous studies, water pollution is very serious when it is classified to be group
IV and V (Shua and Huang , 2011). Figure 4.23 shows major indicator of water resource
degradation at Chia lagoon.

45
 Siltation of the
10.9
Frequent outbreak of water borne
3

Increase in alien species

18.8

67.3

Figure 4. 23 Major indicators of water quality degradation at Chia lagoon

Some of the major indicators (refer to Figure 4.23) of water quality degradation observed by
the communities were prolonged turbidity (67.3%), siltation of the lagoon (10.9%), and
increase in alien species (18.8%) and frequent outbreak of water borne diseases (3%).

2.3.4 Economic implications of current water quality degradation at Chia lagoon

Table 4. 8 shows the major implication of water quality degradation at Chia lagoon.

Table 4. 8: Major implication of water quality degradation at Chia lagoon

Factors Group Frequency Percentage

water quality degradation Yes 84 83.2
significantly contributing to the fish 16.8
No 17
catches at the lagoon
Total 101 100
Whether current status of water yes 70 69.3
quality has serious implication on 30.7
No 31
human health
Total 101 100
For the past 10 years, household noted yes 64 63.4
the decline in biodiversity in the
lagoon as the result of changes in No 37 36.6
water quality
Total 101 100
Decline in biodiversity at the lagoon due Yes 82 81.2
to water quality degradation affect your 18.8
No 19
income
Total 101 100

46
The current water quality degradation at Chia lagoon has serious economic implication on the
households around. Table 4.8 indicates that about 83.2% observed that water quality
degradation significantly contributes to decline in fish catches at the lagoon. Similarly, 69.3%
of the surveyed households observed that the current status of water quality has a serious health
implication to the communities around. According to Peters and Meybeck, (2000) the major
water quality issues resulting in degradation of water resources include water-borne pathogens
and noxious and toxic pollutants. The study further reported that these major water quality
issues negatively affect various economic activities in the society. 63.4% of the surveyed
households also noted that there has been a serious decline in biodiversity in the lagoon as a
result of changes in water quality. The decline in biodiversity is strongly linked to a serious
economic loss experienced by the communities around. Evidently, 81.2% of the surveyed
households noted a significant decline in income generated from the lagoon as a result of a
decline in fish resources. It should be noted that efficient utilization of water resources can
ensure good quality and quantity of water at Chia lagoon. At present, no study has been
conducted to indicate the economic loss experienced over the past years as a result of water
quality degradation and depletion. Similarly, there is no agreement upon compensation of water
resources degradation at the lagoon. Therefore, section 4.2.5 presents estimate of the economic
value of the water resources at Chia lagoon.

2.3.5 Analysis of the households’ willingness to pay amount

The results from the analysis of the willingness to pay amounts are presented in Table 4.9
below.

Table 4. 9: The willingness to pay amounts

Parameter Number Maximum Minimum (MK) Mean Sum (MK)
(MK) (MK)
Amount /month 57 81697.23 696.825 7,870.455 456,684.435
MK733.5 = 1 US$ as of December, 2016
A total of 57 out of 101 respondents (57.4%) were willing to pay towards the conservation of
water resources program at Chia lagoon. The rate of willingness to pay was higher than what
was achieved by previous researchers using contingent valuation method elsewhere. For
instance, Omwenga (1995) in New Zealand achieved a response rate of 25.8% in contingency
valuation case studies and Barnnett, Marrison and Blamey (1998) in Australia achieved 47.3%
of response rate. The current study further revealed that the lowest willingness to pay value
was MK696.83 (US$0.95/month). The maximum willingness to pay value was MK 81697.23
47
(US$111.38/month). Similarly, Venkatachalam and Jayanthi (2016) in India noted that the
WTP value had a range between Rs. 0.00 and Rs. 8,000.00 and the median value is Rs.
1,450.00, which is found to be lesser than the mean value. Elsewhere, the study conducted by
Xiong and Kong, (2017) also showed that 87 to 80% of farmers were willing to accept
ecological compensation, with an average price of $858.81/household per year in Poyang Lake
Wetland. The mean economic value was MK7,870.46 (US$10.73) per month translating to the
annual mean of MK94,445.46 (US$128.78). However, the study revealed that if all 57
residents paid the monthly maximum amount MK81,697.23 (US$111.38), total of
MK55,880,905.32 (US$76,183.92) annual return could be recovered. Chia lagoon has
approximately 7857 households (Banderson et al., 2008). Based on this household survey,
ceteris paribus, if every household could manage to pay an annual mean of MK 94,460.13
(US$128.78), the total annual economic value of MK742,173,241.41 (US$1,011,824.46) could
have been recovered. On the other hand, ceteris paribus, if all 7857 households paid the
monthly maximum amount of MK81697.23 (US$111.38), translating to annual mean of MK
980,366.76 (US$1336.56), the total annual economic value of MK7,7 billion
(US$10,501,351.9) could be recovered. Similar findings were reported by Venkatachalam and
Jayanthi (2016) in Chennai City, India.

2.3.6 Analysis of the household’s responses towards varying bid amount

In Figure 4.24, a linear trend line fitted response series indicated a slight downward slope.

35.0

31.0
30.0

25.0
Rate of responses

20.0

15.0 15.5
13.8

10.0 8… 10.3
6.9
5.0 3… 1.7
3.4 3.4 1.7
0.0
699.79 719.52 749.20 852.24 931.72 1030.34 1236.41 1545.51 2060.68 6321.87 81697.23
The bid amount (MK/month)

Figure 4. 24 Analysis of bid responses

48
The explanation for this observation was due to the influence of the respondent’s decision to
participate in the water resources conservation program. The response rate seems to vary
randomly from one bid amount to another. Contrary to the theoretical expectation, the response
rate dropped from 31% to 15.5% with decrease in the bid amount from MK748.14 (US$1.02)
to MK 696.83 (US$0.95). In reality, it was expected that the respondents offered MK 696.83
(US$0.95) bid amount to find it easy to respond positively as the financial burden associated
with ‘yes’ would be low. On the other hand, response frequency was lowest at MK81697.23
(US$111.38) bid amount. The probable explanation for the observed low response frequency
in the bid amount of MK 696.83 (US$0.95) could be; the respondents given this bid amount
could not believe that water conservation program at the lagoon could be financed through such
a small contribution and hence could not take the survey serious. Carson, Groves and Machina,
(2000) argued that the respondents who face the low bid that seem unrealistic are likely to
replace this bid with ‘expected cost’ and respond accordingly resulting in higher proportion of
‘no’ to the bid than one would otherwise expect.

Fig 4.24 further indicated that the proportion of respondents answering ‘yes’ (the probability
of answering ‘yes’) to the question of willingness to pay decline as the bid amount increases.
Wheeler and Damania (2001) reported similar pattern in ‘yes; responses as the bid amount
increases. Economic theory predicts a downward trend in consumer response to increase in
price of normal goods or services. Therefore, it may be concluded that respondents in this study
behaved in a manner consistent with economic theory. It was also interesting to note that the
proportion of responding ‘yes’ was higher than that of responding ‘no’ to the low bid amount
of MK 696.83 (US$0.95). This means that respondents were more likely to say ‘yes’ than ‘no’
at lower bid amounts. Though FAO, (2004) report revealed that it is very difficult to set specific
price on how much each water user should pay to conserve the resources, the study showed
that at MK 718.83 (US$0.98) bid amount, management of the water resources at Chia lagoon
was preferred by the majority.

The study further evidenced that 57.4% of the respondents willing to pay justified their decision
based on the water resources situation at the lagoon. For instance, 30.5% of the households
were willing to pay in order to improve the status of water resources at the lagoon so as to
restore the health biodiversity as well as protecting the endangered species which in the long
run would translate into direct economic value. On the other hand, 25.4% of the surveyed
households willing to pay towards conservation of water resources at the lagoon cited out that
the money could significantly contribute to the authorities who face budget constraints in
49
implementation of water conservation measures at the lagoon. The study findings conform to
the work of O’Neil, (1997) who observed that the society gives greater consideration to the
nature of deliberative institutions for resolving enviromental problems and the social and
economic framework that sustain them. Figure 4.25 highlights the main reasons for the
household willingness to pay towards water resources conservation program at Chia lagoon.

1.7 Other reasons

23.7
The initiative can lead into more
protection of water resources
30.5
Improve status of water resources to maintain
biodiversity and protection of endangered species

Contribute money to authorities with budget

constraints to protect water resources
Mitigate impcat of climate change
25.4
18.6

Figure 4. 25 Main reasons for household willingness to pay

The study further revealed that 23.7% observed that water resources are degrading because
they are not protected. Therefore, they saw this initiative as the only option that could lead into
more protection of water resources at the lagoon. 18.6% of the surveyed household willing to
pay observed that the lagoon is facing great impact of climate change leading into more water
degradation and depletion. Water degradation and depletion has caused great loss of fish
biodiversity from the lagoon resulting into heavy economic loss. Hence, the initiative was
perceived as one way of mitigating against the impact. 1.7% of the surveyed households willing
to pay observed that the initiative could strengthen the water resources conservation
governance structures in the communities around which consequently could lead into more
water protection in the lagoon. Conversely, the majority (34.1%) of the households (refer to
figure 4.26) who were not willing to pay justified their reasons based on the fact that it is the
responsibility of the government to conserve the water resources at the lagoon. Others (29.2%)

50
suggested that fishermen who appeared to be direct beneficiaries of water resources had to pay
as a compensation for the economic benefits they derive from the lagoon waters.

Decline in biodiversity and endangering of

species due to water resources degradation at
Chia lagoon is a minor problem
11.4

29.5

Someone else (Fishermen who benefit from

lagoon waters) shulp pay
25

Does not have money

Someone else (government) will pay

34.1

Figure 4. 26 : Main reasons for household not willing to pay

25% suggested that they could not find money to contribute towards the conservation of water
resources in the lagoon. This assertion was further confirmed from the study findings which
showed that about 52% of the surveyed households had monthly income levels of not more
than US$ 21.07. Translating the income into an annual figure, it implies that the income of the
majority of households surveyed does not exceed US$252.88. On daily bases, 52% of the
households live on less than a dollar (US$ 0.7) a day. This probably could be the reason of not
managing to contribute towards the water resources conservation program. However, the study
further revealed that 11.4% of the surveyed households perceived the problem of decline in
biodiversity and endangering of species due to water resources degradation at Chia lagoon as
a minor problem.

51
4.2.5 Analysis of the monetary value the communities are willing to pay to conserve
water resources at Chia lagoon
Overall, the study revealed that the respondents were willing to contribute, the monthly range
of MK 696.83 (US$0.95) to MK81697.3 (US$111.38) per individual and monthly average of
MK 7870.45 (US$10.73) per individual generating aggregate values ranging from
MK65,699,448.3 (US$89,569.8) to MK7.7 billion (US$10,501,351.9) annually and on average
MK742,173,241.4 (US$1,011,824.46) per annum. A number of studies have previously
reported similar findings. For instance, Venkatachalam and Jayanthi found that households
were willing to pay a maximum lump-sum amount of Rs. 2,096.59 per annum for
improvements in the quality of Pallikaranai marshland. Venkatachalam and Jayanthi further
argued that in case the proposed conservation measures were carried out adequately, the
households would derive a benefit worth of Rs. 2,096.59 annually for the next five years.

Similarly, Oglethorpe and Miliadou (2000) estimated the total economic value of Lake Kerkini
in Northern Greece and reported that sustainable management of the lake could be justified on
the basis that respondents were willing to pay, on average £15.24 per person per year generating
an aggregate value of £23.3 million per year. Similarly, Zhongmin, Guodong, Zhiqiang,
Zhyong and Loomis, (2003) estimated the total economic value of restoring ecosystem services
in the Ejina region in China and obtained a present value of aggregate willingness to pay of
US$ 6.67million per year. (Loomis, Kent, Strange, Fausch and Covich, 2000) further estimated
total economic value of restoring ecosystem services in an impaired river basin and reported
household mean willingness to pay estimate of US$252 per annum and aggregate annual value
of US$ 70 million. In Malawi, Zuze, (2013) estimated the monthly mean household WTP to
conserve Lake Chiuta’s biodiversity to be at MK325.86 ($0.91) where as the monthly aggregate
WTP was MK3.3 million ($9,178.69) with annual aggregate WTP of $11.0M.

4.2.6 Analysis of income inequality and willingness to pay

Table 4.10 shows that households are grouped into four.

Table 4. 10: Households income inequality

Quartile (%) Income(US$) Cumulative % income Cumulative %household
20 53,178.75 0.03 0.03
40 137,648.61 0.08 0.11
60 284,194.575 0.16 0.26
80 409,219.65 0.23 0.49
100 931,669.695 0.51 1.00
Total 1,818,111.78 1.00 1.88
52
Those who earn less than MK 55,379.25 (US$75.50) of the livestock annual economic value,
those with earnings within MK 137,648.61 (US$ 187.66) and MK284,209.25 (US$387.47),
those with earnings within MK284,209.25 (US$387.47) and MK 409,219.65 (US$ 557.9),
those with earnings above MK 409,219.65 (US$ 557.9). The study showed that 20% of the
population from the low class earned only 3 % of the total income from the whole income
generated from livestock production. On the other hand, 20% of the population from the higher
class earned 51 % from the total income. The Lorenz Curve in figure 4.27 shows the amount
of inequality in the income distribution among the households. The Gini coefficient for the
households involved in livestock production was 0.56.

Gini coefficient = 0.56

1.6
cummulative % proportion of income

1.4

1.2
Perfect distribution line =0.28
1

0.8

0.6 Gini index

0.4
Lorenz curve =0.5
0.2

0
0.00 0.10 0.20 0.30 0.40 0.50 0.60
Cummulative proportion of households from lower income

Figure 4. 27 The Lorenz Curve showing the level of inequality in the income
distribution among the households

Table 4.11 and figure 4.28 described the influence of crops grown using water from the lagoon
on annual households’ income inequality.

53
Table 4. 11 Income distribution

Quartile (%) Income (MK) cumulative %income Cumulative % household

20 332,282.84 0,03 0,03
40 825,884.33 0,08 0,11
60 1,705,174.79 0,16 0,26
80 2,455,339.91 0,23 0,49
100 5,590,032,84 0,51 1,00
Total 10,908,714,69 1,00 1,88

Table 4.11 showed that 20% of the households in the first quartile earned only MK332,282.84
(US$453.01) of the total income. On the other hand, 20% of the households in second quartile
earned MK825,884.33 (US$ 1125.95) from the total income, 20% in the third quartile earned
MK1,705,174.79 (US$ 2324.7) while in fourth quartile, 20% of the households earned
MK2,455,339.91 (US$ 3347.43) of the total income. Finally, 20% of the upper quartile earn
MK5,590,032,84 (US$ 7621.04) from the total income. The study further showed that 20% of
the population from the low class earned only 3 % of the total income. On the other hand, 20%
of the population from the higher class earned 51 % from the total income. Figure 4.28 indicates
that when the Lorenz curve is closer to the line of equality, the Gini coefficient is reduced
closer to zero which represent a smaller income inequality. However, in the study, the Lorenz
Curve is more concave and the Gini index is larger. The value of Gini coefficient was 0.54.

1.6
Commulative % proportion of

1.4 Gini coefficient = 0.54

1.2
1
Perfect distribution line =0.27
income

0.8
0.6
Gini index
0.4
0.2 Lorenz curve =0.5
0
0.00 0.10 0.20 0.30 0.40 0.50 0.60
cummulative proportion of households from lower income

Figure 4. 28 The Lorenz Curve showing the level of inequality in the income
distribution among the households

54
Table 4.12 and figure 4.29 describe the influence of off farm activities taking place around the
lagoon periphery on annual households’ income inequality. Table 4.12 showed that 20% of
the households in the first quartile earned only MK65,903.32 (US$89.86) of the total income.
On the other hand, 20% of the households in second quartile earned MK112,504.23 (US$
153.38) from the total income, 20% in the third quartile earned MK178,915.32 (US$ 243.92)
while in fourth quartile, 20% of the households earn MK354,852.63 (US$ 483.78) of the total
income. Finally, 20% of the upper quartile earn MK 840,554.33US$ 1145.95 from the total
income.

Table 4. 12: Cumulative income of the households from four quartiles

Quartile (%) Income (MK) cumulative %income Cumulative % household
20 65,903.32 0,04 0,04
40 112,504.23 0,07 0,11
60 178,915.32 0,12 0,23
80 354,852.63 0,23 0,46
100 840,554.33 0,54 1,00
Total 1,552,738.82 1 1.85

The study further showed that 20% of the population from the low class earned only 4 % of the
total income. On the other hand, 20% of the population from the higher class earned 54 % from
the total income. However, figure 4.29 indicated that the Gini coefficient of income generated
from off farm income activities was 0.48.

1.6
Gini coefficient = 0.48
cummulative proportion of income

1.4

1.2

1 perfect distribution line = 0.24

0.8

0.6

0.4
Lorenz curve =0.5
0.2

0
0.00 0.10 0.20 0.30 0.40 0.50 0.60
cummulative proportion of household from lower income

Figure 4. 29: The Lorenz Curve showing the level of inequality in the income
distribution among the households

55
Todaro and Smith, (2009), explained that the Gini coefficient with highly unequal income
distribution typically lies between 0.5 to 0.7. The Gini coefficient of income generated from
livestock was 0.56 which was above 0.5 suggesting high income inequality among the
households. Again, it was presumed that those whose income was less than MK 55,379.25
(US$75.5) were those who had less utilisation of water resources in the lagoon for livestock
production. Households whose annual income was within MK137,648.61 (US$ 187.66) and
MK 283,864.5 (US$387) relatively utilised the lagoon water resources for economic values.
Therefore, the empirical evidence from the study indicated that the households in the upper
quartile (20%) who earned above 840,554.33 (US$ 1270.17) from livestock production, had
large number of livestock. According to Zimmer and Renault, (2003), roughly 45 % of the
total consumptive water use of food production is dedicated to feed for live animals. This
implies that large number of livestock per household corresponded to high water resources
demand from the lagoon. Therefore, it was very apparent that those households with higher
income had higher economic benefits from the water resources at the lagoon than their
counterpart.

Similar observations were made on income generated from crop farming. The value of Gini
coefficient was 0.54 which suggested high income inequality generated from crop farming
among the households. Unlike in livestock production, Ferrira, (1996) argued that the major
rise of rural incomes and inequality could be attributed to less efficient farmers who found
themselves unable to participate in the income growth derived from crop farming activities as
experienced by wealthier farmers. The argument implies that farmers who were efficiently
engaged in agricultural activities around the lagoon had higher income than those who were
not active. Contrary to the findings in crop and livestock production, the Gini coefficient of
income generated from off farm actvities was 0.48. The value was lower compared to the values
previously reported by Todaro and Smith, (2009). This implies that income generated from off
farm actvities does not necessarily affect the income distribution among the households. The
reason perhaps could be; most of the off farm actvities do not directly use the water resources
as it is a case in livestock and crop farming.

56
Theoretically, the study displayed linkage between income delived from utilisation of water
resources for various economic activities and how much the households were willing to
sucrifice in order to conserve the resources. The same linkage was displayed by Broberg (2014)
who went further to report that relative income effects a signficant role in determining the
household willingness to pay for enviromental goods. According to the economic theory, how
much household is willing to pay depends on the maximum satisification derived from the
resources. Theoretically, households with higher income were expected to pay a higher amount
than those with lower income. This was based on the fact that wealtheir households had higher
demand for water resources for livestock and crop production than their counterparts. In other
words, big farmers increase water use than small farmers. The argument presented in the study
contradicted with Buckley and Croson (2006) who argued that low income players contribute
a higher relative share of their income than their counterparts. However, Hofmeyr and Visser
(2007) argued that households heterogeneously endowed players in public good contribute the
same percentege as their income.

It was very interesting to note that enviromental public consumption goods such as water
resources and private consumption goods do not follow the same economic theory. In private
goods, how much a household consumes determines how much that particular household will
pay at a given price. The study rejects the fact that both the private consumption good and the
environmental public goods such as water resources are a normal good for all households in
the population, and that, therefore, individual willingness to pay for the environmental good
increases with individual income. In other words, a household having higher income does not
necessariry mean that the particular household would pay more. Therefore, the study findings
present a very strong policy implication as the government plans to invest in water resources
conservation and management programs. The study highlights that successful policy
implementation depends on tackling the issues surrounding the tragedies of the water resources
as a common property.

4.3 Analysis of factors influencing the willingness to pay

4.3.1 Descriptive statistics of empirical demographic variables

Descriptive statistics of the demographic variables used in the binary logistic regression model
are provided in Table 4.13.

57
Table 4. 13: Descriptive statistics of demographic factors
Factors Group Frequency Percentage
less than 4 52 51
Household size
more than 4 49 49
Total 101 100
less than 40 53 52
Age of the respondent
above 40 48 48
Total 101 100
Married 76 75
Civil status
single 25 25
Total 101 100
literate 54 53
Literacy level
illiterate 47 47
Total 101 100
Male 56 55
Sex of the respondent
Female 45 45
Total 101 100

The majority (52%) of the respondents were above 40 years of age. Similar findings were
reported by Acquah and Abunyuwah (2011) in a study conducted in Ghana. The Ghana study
noted that the highest (33.7%) age distribution among the fishermen was within the range of
41-50 years old. The study further reported highest (51%) number of male respondents than
female (49%). Kopa (2007) had similar observation in a study conducted in Nkhotakota,
Central Malawi whereby it was reported that 73% of the respondents were male. The study
further revealed that 75% of the respondents were married, with other 25% being single,
widowed, divorced or separated. About 51% had a family size of above 4. The literacy level
was 49% meaning that about 51% of the respondents could not read nor write. Conversely,
Malawi demographic and health survey report indicated slightly higher literacy level (69.7%)
in Nkhotakota district (GoM, Demographic and Health Survey 2015-2016, 2017) than what the
study reported at Chia lagoon.

4.3.1.1 Results of the logistic regression model for demographic variables:

Table 4.14 reports the logit estimates of the probability of the respondent willingness to pay.

58
Table 4. 14: Effects for the best fitted logistic regression model of demographic
variables
Parameters β S. E Wald Sig
Constant -2.62 0.82 10.25 0.00**
GH -1.19 0.71 2.81 0.09ns
AGH -2.77 0.85 10.63 0.00**
CS -0.15 0.75 0.04 0.85 ns
LL 2.31 0.83 7.52 0.01 *
HS -1.15 0.71 2.66 0.10 ns
Hosmer and Lemeshow test, Chi-
square=5.44(df=8), P=0.71
-2log likelihood =59.1%
Cox & Snell R Square=0.54
Note: Nagelkerke R Square=0.73
Note: ns indicates not significant while ** and * indicate significance at 0.01 and 0.05
probability level of confidence
GH=gender of the household head, AGH= age of the household head, CS=civil status,
LL=literacy level, HS=household size

The logistic regression model was tested for multicollinearity. The correlation matrix showed
that multicollinearity was not a source of concern. The study showed that none of the
explanatory variables overlapped and the multiple regression from estimating coefficients was
able to isolate their independent influence. Table 4.14 reports the logit estimates of the
probability of the respondent willingness to pay towards water resources conservation program.
The Cox and Snell (1989) R-squared (0.54) and Nagelkerke (1991) R-squared (0.73) statistics,
suggested that the model explained a substantial amount of variance in the choice of the
respondent’s willingness to pay towards water resources conservation program. As evidenced
by Hosmer and Lemeshow (1989) Chi-square value of 5.44 and non-significance (p>0.05), the
goodness –of- fit indicated that the fitted model was adequate.

The independent variables such as gender of the household (GH), civil status (CS) and
household size (HS) had negative regression coefficients. However, it was noted that gender
of the household head (GH), civil status (CS) and household size (HS) were not statistically
significant (p>0.01 or p>0.05) even at α = 0.05. The model explained that these independent
variables had no significant (p>0.01 or p>0.05) influence over the decision of the household’s
willingness to pay towards the economic value of water resources at the lagoon. On the other
hand, the relationship between dependent variable and age of the household head was negative
with a correlation regression coefficient of -2.77 and Wald of 10.63 and statistically significant
at α = 0.01. The results conform to the theoretical expectations. Age hypothetically was
expected to be negative as older respondents’ participation in water resources conservation

59
program at the lagoon was expected to be lower than the young respondents. The probable
reason could be; some of the elders might not be interested in conserving the water resources
at the lagoon due to the fact that they might not live longer to enjoy the economic benefits of
the proposed program. Another probable reason could be; most fishing activities which
generate large portion of economic value from the lagoon waters are done by young people. In
terms of education levels, theoretically, young people could be more educated than elders and
they might have understood economic implication of water resources degradation at the lagoon
in terms of fishery more than the elders. Thus, these factors induced them to be more willing
to pay than the elders. The results conform to the previous empirical findings reported by
Bateman and Brouwer (2006) in enviromental valuations. The study by Mezgebo and Ewnetu
(2015) in Mutale Local Municipality, South Africa also showed that the respondents of age
above 50 years were less willing to pay more for improved water services in the short term. On
the contrary, Harun, Muresan, Arion, Dumitras and Lile (2015) in a study done in Iraq found
that older people were willing to pay more for water irrigation than the young farmers. The
Iraq study noted that older people were probably more closely linked to their villages and
tradition, which made them willing to pay more than the younger farmers.

On the contrary, the relationship between dependent variable and level of literacy was positive
with a correlation regression coefficient of 2.31, Wald of 7.52 and statistically significant at α
= 0.05. Theoretically, the coefficient was expected to be positive as respondents who were
literate were expected to be more conversant with economic values derived from the water
resources at the lagoon and were likely to be more willing to pay than the respondents who
were not literate. The findings were also similar to those from (Kanyoka , Farolfi and Morardet
, 2008) in South Africa where the level of education had an influence on the amount of money
the respondents were willing to pay. Economists have previously argued that highly educated
households tend to adopt productive innovations earlier than those who are relatively poorly
educated (Basu, Narayan and Ravallion, 2002). Surprisingly, others have argued that educated
people are less likely to be willing to pay for programs than their counterpart. Intuitively,
educated people are presumed that they have knowledge and should be held responsible for
creating the problem in the first place and expect them to pay for the restoration. Educated
respondents tend to possess higher analytic capability of the information and knowledge on
any project that might result into environmental degradation (Uematsu and Mishra, 2010).

60
Ample evidence from the study showed that most households who were illiterate justified their
reasons for not paying by citing out that Malawi government is responsible for conserving
water resources at the lagoon. The probable reason could be; these respondents might not be
fully aware of their role in conserving water resources at the lagoon. Another possible reason
could be; the concept of participatory water resources conservation approach might not be well
understood among the households despite the information being disseminated. Similar
observation was made by Schultz (2005) who further reported that education is widely
considered to be the most important form of human capital and Taley and Khadase (2006) went
further to report that low level of formal education is a barrier in disseminating useful
information. Knight, Weir and Woldehanna (2003) also observed that the schooling of the head
of the household reduces risk aversion and encourages the adoption of agricultural innovations
in rural Ethiopia.

4.3.2 Descriptive statistics of socio-economic variables

Descriptive statistics of the socio-economic variables used in the binary logistic regression
model are provided in table 4.15. The majority (58.4%) of the respondents depend on the
lagoon as a main source of water for agricultural activities. On the other hand, 47.5% depend
on water resources from the lagoon for generating their income through fishing, informal
business, farming and other socio-economic activities. Evidently, 52.5% of the respondents
own fishing craft, 52.9% own land around the lagoon, 50.5% have access to grazing land,
52.5% engage in farming activities, 53.5% conduct various businesses around the lagoon and
49.5% practice irrigation using the water from the lagoon. Again 55.4% of the respondents
have access to food gathering from the lagoon. However, in terms of annual income level, the
study revealed that 43% of the respondents have annual income level above US$252.84.

61
Table 4. 15: Social-economic factors

Factors Group Frequency Percentage

Yes 48 47.5
Lagoon Main source of income
No 53 52.5
Total 101 100
Depend on lagoon as main source of water yes 58 58.4
for agriculture No 43 41.6
Total 101 100
yes 53 52.5
Own fishing craft
No 48 47.5
Total 101 100
Own land in the lagoon periphery yes 53 52.9
No 48 47.1
Total 101 100
Yes 51 50.5
Have access to grazing land
No 40 49.5
Total 101 100
Involved in informal business in the yes 54 53.5
lagoon periphery No 47 56.5
Total 101 100
Practice irrigation yes 50 49.5
No 51 50.5
Total 101 100
Yes 56 55.4
access to food gathering from the lagoon
No 45 44.6
Total 101 100
Have annual income level above Yes 43 43
US$252.84 No 58 57
Total 101 100

4.3.2.1 Results of the logistic regression model for socio-economic variables

The logistic regression model was tested for multicollinearity to check if there was a high
degree of linear dependency among several independent variables. The correlation matrix
showed that none of the explanatory variables were strongly correlated or related with each
other. The model was first tested for its power of prediction and goodness of the fit. Table 4.15
shows the logit estimates of the probability of the respondents’ willingness to pay. According
to principles of econometrics, R-squared values were expected to be constrained to the range
of 0-1 (0-100%), with higher values indicating the better model fit (Maddala, 1983). In this
case, the Cox and Snell (1989) were used to test the model’s power of prediction. However, a
modified Cox and Snell was also used to allow R-squared to take on values in the full range of
zero to one, making pseudo –R-squared more compatible to a conventional R-squared statistic.

62
The results showed that Cox and Snell, (1989) R-squared was 0.64 (64%) and modified
Nagelkerke, (1991) R-squared was 0.86 (86%) suggesting that the model explained a
substantial amount of variance in the choice of the respondents’ willingness to pay. Using the
Hosmer and Lemeshow, (1989) goodness of fit test being greater than 0.05 as an indicator that
the model fits the data well, the logistic model in this study, which had a Hosmer and
Lemeshow Chi-square value of 8.55 and non-significance (p>0.05) indicated reasonably a
good fit to the data and, therefore, good overall model fit.

The results showed that independent variables such as farming in the lagoon periphery (FLP),
access to grazing lands (AGL), practice irrigation farming (PIF) and access to food gathering
(AFG) had positive regression coefficients. However, the model revealed that these
independent variables were not statistically significant even at α = 0.05. According to the
econometric theory, these independent variables had no significant influence over the decision
of the household’s willingness to pay towards the economic value of water resources at the
lagoon (Maddala, 1983).
Table 4. 16: Effects for the best fitted logistic regression model of socio economic
variables
Parameters β S. E Wald Sig
Constant 3.28 0.35 6.51 0.01*
LMSI 3.06 0.72 17.80 0.00**
LMSWA 2.35 0.70 11.43 0.00**
LOS -1.93 0.82 5.61 0.02*
FLP 1.12 0.12 0.04 0.85 as
AGL 0.12 0.03 0.01 0.91ns
PIF 0.45 0.28 0.12 0.72ns
AFG 1.65 0.29 1.63 0.06ns
DBLP 3.42 0.64 4.67 0.03*
HALI 1.63 0.28 5.12 0.02*
Hosmer and Lemeshow test, Chi-
square=8.55(df=8), P=0.38
-2log likelihood =137.78
Cox & Snell R Square=0.64
Note: Nagelkerke R Square=0.86
Note: ns indicates not significant while ** and * indicate significance at 0.01 and 0.05
probability level of confidence
LMSI=Lagoon main source of income, LMSWA= Lagoon main source of water for
agriculture, LOS=Land ownership, FLP=Farm in the lagoon periphery, AGL=Access to
grazing lands, PIF=Practice irrigation farming using water from the lagoon, AFG =Access
to food gathering from lagoon waters, DBLP= Does business in the lagoon periphery,
HALI=Household annual level of income

63
However, the analysis revealed a positive relationship between the probability of the
respondent’s willingness to pay and the use of a lagoon as the main source of water for
agriculture (LMSWA). Regression model was significant at α = 0.01 and had coefficient of
2.35 and Wald of 11.43. The results explained that those households who depend on the lagoon
as main source of water for agricultural production were more willing to pay than their
counterparts. The findings conform to the theoretical expectation. In theory, the households
involved in agricultural activities at the lagoon were presumed to derive maximum economic
benefit from the water resources and therefore, their probability of willingness to pay was
expected to be higher than their counterparts. The study findings conform to the conceptual
model developed by Leeworthy and Bowker, (1997) which summarized linkages between the
economy and the environment. The model explained that the actual conditions relating to
quality and quantity of water resources in wetlands are important factors determining the
individual’s perception towards the conservation. This explains that the level of demand of
water resources economic value in terms of agriculture significantly influence the individual’s
perception towards the value of the lagoon.

Similarly, the results further revealed a positive relationship between the probability of the
respondents ‘willingness to pay and the level of income (LI)`. Regression coefficient was 3.06,
Wald of 17.80 and was statistically significant at α = 0.01. The findings were in line with
theoretical expectations. In theory, level of income was expected to have a positive influence
on the respondents’ willingness to pay. Based on the economic theory of demand, the
coefficient was expected to be positive as the respondents with high level of income were
expected to have derived more economic benefits from the lagoon than their counterparts.
Again, the respondents with higher income were expected to be fully aware of the economic
benefits derived from the water resources. Theoretically, the psychology of the community is
that when aggregate real income is increased, aggregate consumption of high quality water
resources increases. The issue of higher incomes was also found by other previous studies. For
instance, Arouna and Dabbert (2012) showed a positive correlation between the level of
income and willingness to pay for water supply improvement in Benin. Similar results were
also reported by Mezgebo and Ewnetu (2015) in Nebelet town, Ethiopia.

64
The results from the study further revealed a negative relationship between the probability of
the respondents ‘willingness to pay and land ownership. Regression coefficient was -1.93,
Wald of 5.61 and was statistically significant at α = 0.05. The findings contradicted the
theoretical expectations. It was anticipated that households who possessed the land in the
lagoon periphery to be more willing to pay than their counterparts as they are expected to be
more involved in agricultural activities which directly use the water resources at the lagoon
than their counterparts. Similar observation was made by Johnson, Moran and Vintenc (2008)
who further reported that the decisions on how to manage water resources in the lagoon could
be based on the location of land used for agricultural production or settlements.

However, instinctively, 1964 Malawi Water Resources Act,Cap 73:03 stipulated that there
shall be no agriculture and infrastructure construction activities below the 477 meters above
mean sea level contour line along Lake Malawi and below the 100-year flood water level along
rivers (GoM, 1965). It could be theoretically presumed that some of the households who
possessed land within the buffer zone were aware of the Water Resources Act implication on
their social economic activities and were less willing to pay towards the program. Therefore,
the results are particularly very relevant for policy-makers when deisgning appropriate water
resources conservation program.

4.3.3 Descriptive statistics of institution factors

Descriptive statistics of the institution variables used in the binary logistic regression model
are provided in table 4.16. The majority (61%) of the respondents reported that they had no
trust in the existing natural resources conservation committees. From psychological
perspective, trust affects the people’s behavior and reaction on the situation in the communities.
According Twerefou, Ernest and Baffour (2007) different sources of conflicts in most African
countries of which amongst being land use conflicts, royalties, resettlements and survival of
the individual households are attributed to lack of trust. Therefore, the study revealed that some
of the challenges of sustainable water resources conservation at Chia lagoon could be attributed
to lack of trust in the existing natural resources conservation committees. Nevertheless, the
study revealed that the majority (67%) of the households believed that government is capable
of implementing water resources conservation program at the lagoon.

65
Table 4. 17: descriptive statistics of institution factors

Factors Group Frequency percentage

Yes 40 39.6
Household ‘social trust,
No 61 60.4
Total 101 100
Water Resources Conservation Civic education yes 48 47.5
and social networking involvement No 53 52.5
Total 101 100
Do you trust that government is capable of yes 68 67.3
implementing the water resources conservation 32.7
No 33
program
Total 101 100
Does the water resources problem directly affect Yes 74 73.3
the household No 27 26.7
Total 101 100
yes 60 59.4
Influence of extension contact
No 41 40.6
Total 101 100
Does the household have knowledge on water
resources user rights yes 47 46.5
No 54 53.5
Total 101 100
Household has access to information about
IWRM yes 44 43.6
No 50.3 56.4
Total 101 100
Does any water resources conservation
committee around the lagoon get funding from
local or external organisation Yes 47 46.5
No 54 53.5
Total 101 100
Does household have knowledge of water
resources degradation or depletion at the lagoon Yes 66 65.3
No 35 34.7
Total 101 100

The study further revealed that the majority (53.2%) of the respondents had poor access to
water resources conservation civic education and social networking despite the majority
(65.3%) being aware of the problem of water resources degradation and depletion at the lagoon.
Nwankwoala (2012) argued that the challenges posed by degradation of wetlands could be
better understood by the communities when viewed against backdrop of the benefits derived
from the resources in the wetlands. This implied that poor access to water resources

66
conservation civic education and social networking could negatively affect the communities
towards adoption of sustainable water resources conservation at the lagoon.

4.3.3.1 Results of the logistic regression model for institutional variables:

The logistic regression model was tested for multicollinearity. The correlation matrix showed
that multicollinearity was not a source of concern. The study showed that none of the
explanatory variables were strongly correlated or related with each other. Table 4.16 reports
the logit estimates of the probability of the respondents’ willingness to pay towards water
resources conservation program. Within prediction modelling, the goodness of fit of a model
referred to as predictive performance was high. Evidently, the Cox and Snell (1989) R-squared
(equals to 0.58) and Nagelkerke (1991) R-squared (equals to 0.78) statistics, suggested that the
model explained a substantial amount of variance in the choice of the respondents’ willingness
to pay towards water resources conservation program. The goodness of fit before default
logistic regression model was checked using formal statistical tests. In Table 4.17, the
Lemeshow Chi-square value was 5.12 and non-significant at 0.05 indicating that the model was
reasonably a good fit to the data and, therefore, good overall model fit.

Table 4. 18: Effects for the best fitted logistic regression model of demographic variables
PARAMETERS B S.E. Wald Sig.
CONSTANT -2.98 1.17 6.51 0.01**
HST 1.21 0.80 2.31 0.13ns
WRCCESNI 0.83 0.85 6.97 0.02*
IT 0.74 0.76 0.95 0.33ns
KWDD 0.28 0.88 0.10 0.06ns
WRPDH 1.05 0.82 1.62 0.02*
AEXTS 2.47 0.83 8.83 0.00**
KKWRUR 0.80 0.82 1.53 0.061ns
AIIWRM 1.52 0.75 4.10 0.043ns
Hosmer and Lemeshow test, Chi-square=5.12 (df=8), P=0.75
-2log likelihood =50.64
Cox & Snell R Square=0.58
Note: Nagelkerke R Square=0.78
Note: ns indicates not significant while ** and * indicate significance at 0.01 and 0.05
probability level of confidence
ST= Household ‘social trust, WRCCESNI= Water Resources Conservation Civic education
and social networking involvement, IT= Institution trust, KWDD= Knowledge of water
resources degradation and depletion, WRPDH= Water resources problem directly affect the
household, AEXTS= Access to extension services, KKWRUR= Knowledge on water resources
user rights, AIIWRM= Access to information on Integrated water resources management

67
Table 4.16 further displays the results of the Wald tests. The explanatory variables such as
social trust (HST), Institution trust (IT), knowledge of water resources degradation and
depletion (KWDD), access to information on integrated water resources management (IIWRM)
knowledge on water resources user rights (KKWRUR) were not statistically significant even
at α = 0.05. In other words, the null hypothesis was consistent with the notion that the observed
difference was simply the result of random variation and not statistically significant (p>0.05,
p>0.01). The model explained that these independent variables had no influence over the
decision of the household’s willingness to pay towards the economic value of water resources
at the lagoon. Nevertheless, water resources conservation civic education and social
networking involvement (WRCCESNI) and water resources problem directly affects the
household (WRPDH) were statistically significant at α = 0.05 while access to extension
services (AEXT) was statistically significant at α = 0.01.

Although, social trust was not significant (p>0.05, p>0.01), it is very apparent that a belief in
the honesty, integrity and reliability of others has a significant influence over household’s
financial contribution towards the communities’ natural resources conservation program.
Theoretically, the study expected positive regression coefficient of social trust and willingness
to pay. The households which were more connected to others were expected to have high social
trust in the establishment of the governance structure that would facilitate water resources
conservation program at the lagoon. In consistence with the theoretical expectation, the study
revealed that household ‘social trust (HST) had a positive sign of the regression coefficient
suggesting that high social trust among the households around the lagoon would increase the
probability of the household willingness to pay towards water resources conservation program
at Chia lagoon. In concurring with Ostrom, (1990) the study observed that ability of local
groups to cooperate plays a large role in avoiding the negative consequences of the excessive
exploitation of the resources that would result from purely individualistic behaviour under open
access. Evidently, Ajuha, (1996) showed that in Cote d’Ivoire the degree of land degradation
was worse in more ethnically heterogeneous villages, suggesting difference in the effectiveness
of community controls and cooperation due to social factors.

68
Similarly, institution trust (IT) had a positive sign of the regression coefficient suggesting that
high institution trust (IT) among the households around the lagoon would increase the
probability of the household`s willingness to pay towards water resources conservation
program at Chia lagoon. This implies that the high trust of the household in the institutions
such as government arms would result in increase in community’s financial contribution
towards the proposed water resources conservation program. However, the study revealed that
institution trust was not statistically significant (p>0.05 or p>0.01) which suggested that it had
no significant influence over the communities’ willingness to pay. The probable reason could
be; due to the fact that the concept of water resources degradation and depletion (KWDD) was
not well understood by the communities around the lagoon. Evidently, knowledge of water
resources degradation and depletion (KWDD) at lagoon was not statistically significant
(p>0.05 or p>0.01) contrary to theoretical expectation though had a positive sign of the
regression coefficient suggesting that high understanding of water resources degradation and
depletion problems at the lagoon would increase community’s willingness to pay towards the
water resources conservation program.

Similarly, understanding of integrated water resources management (IWRM) at a grass root

level theoretically was expected to increase community’s financial contribution towards water
resources conservation program at the lagoon. As evidenced in the study, regression coefficient
had a positive sign suggesting that high understanding of the concept would result into increase
in community’s willingness to pay. This is due to the fact that IWRM takes an ecosystem
perspective of water together with its human uses, encourages broad stakeholder participation
and stresses that water, in all its competing uses, must be valued as an economic good (GWP,
2000). However, the study revealed that regression coefficient was not significant (p>0.05 or
p>0.01) suggesting that the concept of IWRM was not well understood at a community level
hence could not influence community’s willingness to pay towards water resources
conservation program.

Additionally, although international human rights law recognizes that all people have rights to
determination and to the pursuit of economic, social and cultural development, the study
revealed that the concept was not well understood by the communities despite United Nations
Declaration on the Rights of Indigenous Peoples as stipulated in Article 32[2]. The study
revealed that regression coefficient of knowledge on water resources user rights (KKWRUR)
was not significant (p>0.05) suggesting that the concept was not clear to the community and
69
hence could not influence their monetary contribution towards the conservation of water
resources at the lagoon. Theoretically, the study had a positive regression coefficient
suggesting that high understanding of the concept of water rights at community level could
stimulate community’s willingness to pay towards water resources conservation program.
Therefore, in order to understand local water visions, management and practices, water rights
must be made clear and specific to the local communities at the lagoon. On contrary, the study
revealed significant (p<0.05) relationship between water resources conservation civic
education and social networking involvement (WRCCESNI), and household’s willingness to
pay towards the water resources conservation program. Most households who had access to
water resources conservation civic education through conservation agriculture program were
more willing to pay in order to conserve water resources at the lagoon. Similarly, the
households which were more connected to social networks such as electronic media and others
were easily convinced to pay towards the program. The regression coefficient of water
resources conservation civic education and social networking involvement (WRCCESNI) had
a positive sign suggesting that increase in water resources conservation civic education and
social networking involvement (WRCCESNI) would result in more households willing to pay
towards the program. In concurring with Rogers (2003), the study revealed that the behaviour
adopting water resources conservation through monetary contribution travels through networks
as represented by Diffusion of Innovations model. Behaviour choices are predicated on a
variety of social, psychological, institutional, and economic factors and this need to be
understood for successful implementation of water resources conservation program.

The study further revealed a significant (p<0.05) relationship between water resources problem
directly affecting the household (WRPDH) and the household’s willingness to pay. The
regression coefficient of water resources problem directly affecting the household (WRPDH)
had a positive sign suggesting that as households are getting more and more affected by the
problems of water resources and depletion, investment in water resources conservation
becomes an option. Hence more households were willing to pay towards water resources
conservation program at the lagoon. Moldan, (2007) observed that insufficient availability of
water to meet all demands, including minimum environmental flow requirements has
significant impact on the household’s willingness to pay. The study further concurs with
Agudelo, (2001) who observed that as the demand for water resources increases to their
availability, the communities are more willing to pay towards the conservation program to
sustain the resources. The study further evidenced significant (p<0.05) relationship between
70
access to extension services (AEXT) and the household’s willingness to pay. The regression
coefficient of access to extension services (AEXT) had a positive sign suggesting that increase
in access to extension service would increase community’s willingness to pay towards water
resources conservation program. Faraji and Mirdamadi (2002) had simlar observation among
the apple producers in the Damavand area. Other authors also previously mentioned that
extension service play a critical role in facilitating linkages between the communities and other
relevant sectors such as government departments, private sectors, non-governmental
organization, research institutes and education centers (Birner, et al., 2009; Christoplos, 2010).
Meinzen-Dick, et al. (2012) further emphasized that service of extension cannot be undermined
as it significantly contributes to agricultural sustainability, livelihood and wellbeing of
populations in rural areas. Similar observation was made by Mbo’o-Tchouawou and Colverson
(2014) in rural population in Kanya. Kapanda, Matiya, Ng’ong’ola , Jamu and Kaunda (2005)
reported that lack of fish farming extension staff was an important problem for fish farmers in
Mchinji; Malawi. Paris, (2002) further observed that the success and failure of improved
integrated crop-animal technology depends on availability of information related to social
economic impacts of such interventions on rural communities. Therefore, the study found that
households who had access to extension service from government agents, Research Institutes,
NGOs or academic institutions were more willing to pay towards water resources conservation
program at Chia lagoon than their counterpart. This implied that direct involvement of
government extension agents, Research Institutes, NGOs or academic institutions and other
stakeholders can have a significant impact on the household willingness to pay towards water
conservation program at the lagoon.

71
 CHAPTER V

CONCLUSION AND RECOMMENDATIONS

This study was conducted at Chia lagoon in Nkhotakota, Malawi. Chia is the largest lagoon in
Malawi with a total watershed area of 989 km2 and a body water surface area of 17 km2. The
lagoon supports over 55000 human inhabitants. The study used stratified random sampling
technique to obtain a sample size of 101 from approximately 7857 total households. Primary
data was obtained through administering a well-structured questionnaire. Secondary data was
obtained from relevant literature and government departments. Gross Output Value (GOV) was
used to estimate total annual economic wealth of the lagoon. Contingent valuation technique
mostly regarded as the most promising technique in valuing public goods such as water was
applied to estimate households’ willingness to pay for water resources at the lagoon. Gini
coefficient estimated income distribution among the households from various economic
activities. Logit model was applied to identify key factors affecting household’s willingness to
pay for water resources conservation at the lagoon.

The economic valuation results showed that water resources at Chia lagoon provides an annual
monetary value of MK2.7 billion (US$3,7 million). Crop production contributed annual
average income of MK42,088.23 (US$57.38) per household, livestock production contributed
annual average income of 128,362.5 (US$175.00) per household while off farm economic
activities contributed MK132,866.19 (US$181.14) per household. Cumulatively, livestock
production contributed annual aggregate value of 330,687,223.1 (US$450834.66), MK1.008
billion (US$ 1,374,975) from crops, MK1.04 billion (US$1, 423216.98) from off farm
activities and MK 352,083,374.1 (US$480004.6) from fisheries. The results from the study
clearly demonstrated that water resources at Chia lagoon has a considerable economic value.

Contingent valuation results indicated a fairly good overall response rate of 57.4% of
households’ willingness to pay towards water resources conservation program. The results
further indicated that households around the lagoon were willing to pay an annual aggregate
value ranging from MK65.7 million (US$89569.8) to MK7.7 billion (US$10.5 million) and on
average MK0.74 billion (US$1,011,824.46) towards the conservation of water resources at
Chia lagoon. The study further revealed that households were willing to pay the monthly range
of MK 696.83 - 81,697.23 (US$0.95- US$111.38) per individual and monthly average of
MK7,870.46 (US$10.73) per individual.

72
The Gini coefficient of income generated from livestock production was 0.56 and 0.54 from
income generated from crop production. The values were above 0.5 suggesting high income
inequality among the households (Todaro and Smith, 2009). However, the Gini coefficient of
income generated from off farm activities was 0.48 indicating low income inequality among
the households. Theoretically, the study displayed linkage between income derived from
utilization of water resources for various economic activities among the households and how
much the households were willing to sacrifice in order to conserve the resources. The
households with higher income were more willing to pay than their counterparts with relatively
lower income. Results from binary logistic model statistically demonstrated that demographic
(AGH, LL), social-economic (LMSI, LOS, DBLP, HALI) and institution (WRCCESNI,
WRPHH, AEXTS) factors significantly affected household’s willingness to pay at α = 0.01
and α = 0.05.

As indicated in the study that about 57.4% of the households were willing to pay to improve
the status of water resources at the lagoon, it is recommended that a tax/levy be introduced for
using the water resources at the lagoon in order to support local management institutions. As
indicated elsewhere, proceeds could significantly contribute to alleviating budgetary
constraints faced by authorities in undertaking water conservation measures in the lagoon. The
findings further recommend that before giving any policy recommendation aimed at
sustainability of water resources at the lagoon or any water bodies in Malawi, the effects of
income distribution among the households on willingness to pay need to be critically studied.
Again, a similar study should also be conducted in other remaining lagoons, major rivers and
wetlands in Malawi to present their economic contributions at a national level.

73
 REFERENCES
Acquah, H. and Abunyuwah, I. (2011). Logit analysis of socio-economic factors
influencing people to become fishermen in the Central Region of Ghana.
Journal of Agricultural Sciences, 56 (1) ,55-64, DOI: 10.2298/JAS1101055A

Adamowicz, W. L. (2004). What’s it worth? An examination of historical trends and

future directions in environmental valuation. Australian Journal of
Agriculture and Resource Economics, 43 (3), 419-443

Adekola, O., Sylvie, M., De Groot, R., and Grelot, F. (2006). The economic and
livelihood value of perovisioning services of the Ga-Mama wetland.
Wageningen UR: South Africa, Environmental Systems Analysis Group.
Available online at https://halshs.archives-ouvertes.fr/hal-00468552
/document

Agudelo, J. (2001). The Economic valuation of water: Principles and methods. Value
of Water Research Report Series 5, IHE Delft, The Netherlands: Delft.
Available online at www. eprints.utm.my/36992/4/DidikArdiantoMFAB2011
REF.pdf

Arusha, V. (1996). Land degradation, agricultural productivity and common property

evidence from Cote d’Ivoire. Mimeo: University of Maryland. Available
online at www.fao.org/docrep/003/X9447E/x9447e06.htm

Arouna, A., and Dabbert, S. (2012). Estimating rural households’ willingness to pay
for water supply improvements: A Benin case study using a semi-
nonparametric bivariate probit approach. Water International, 37(3), 293-304.

Baerlaine, T., Kasymov, U., and Zikos, D. (2015). Self-Government and sustainable
common pool resource management in Kyrgyzstan. Sustainability, 2014(6),
6714-6728; doi:10.3390/su6106714

Banderson, T. W., Zwide, D. J., Sawasawa, H., Garside, P., Sakama, S., Musika, R.,
Biji, B. (2008). Chia Lagoon Watershed Management Project. Washington:
Washington State University. Available online at pdf.usaid.gov/pdf
docs/Pdacr316.pdf

Barbier, E. B., Acreman, M. and Knowler, D. (1997). Economic valuation of

wetlands: A Guide for policy makers and planners. Glanda, Switzerland:
74
 Ramsar Convention Bureau. Available online at
https://portals.iucn.org/library/node/7212

Bardini, M.D (1999), The Water Policy Reform Program of the Economic
Development Institute: Tracer Evaluation Report; EDI Evaluation Studies,
No. ES98-10; World Bank: Washington, DC, USA. Available online at
documents.worldbank.org/.../en/.../488660NWP0Box338929B01BLIC10ES9
8110.p

Barnnett, J., Marrison, M and Blamey, R. (1998). Testing the validity of responses to
contingency valuation questionnaire. Australian Journal of Agriculture &
Resource economics, 42(2), 131-148.

Basu, K., Narayan, A and Ravallion, M. (2002). Is literacy shared within households?
Theory and evidence for Bangladesh. Labour Economics, 8 (6), 649–665.

Bateman, I and Brouwer, R. (2006). Consistency and construction in stated WTP for
health risk reduction: A novel scope-sensitivity test. Resource and Energy
Economics, 28 (3), 199-214.

Bateman, I., Langford, I., Nishikawa N and Lake, I. (2000). The Axford Debate
Revisited: A case Study Illustrating Different Approaches to the Aggregation
of benefit Data. Routledge, 31(6), 571-582.

Bauman. D, Boland. J and Hanemann M, (1998)., Urban water demand management

and planning. McGraw Hill. Available online at https:
//www.amazon.com/Urban-Water Demand-Management-Planning/.../
00705030

Beal, D. (1995). A travel cost analysis of the value of Carnavon Gorge National Park
for recreation use. Review of Marketing and Agricultural Economics, 63 (2),
293-303.

Bell, R. J., Collie, J. S., Jamu, D and Banda, M. (2012). Changes in biomass of
Chambo in the Southeast arm of Lake Malawi: Stock assessment of
Oreochromis species. Journal of Great Lakes Research, 38 (4), 720-729.
https://doi.org/10.1016/j.jglr.2012.09.022

Bennet, J and Carter, M. (1993). Prospects for contingent valuation: Lessons from the
southeast forests. Australian Journal of Agricultural Economics,37(2) 79–93.
75
Bennett, J. (1984). Using direct questioning to value the existence benefit of preserved
natural areas. Australian Journal of Agricultural Economics, 28, (2), 426-434.

Bennett, J. (2005). Australasian environmental economics: contributions, conflicts

and 'copouts'. Australian Journal of Agriculture and Resource Economics, 49,
(3), 243–26.

Biau, D., Kemeis, S and Porcher, R. (2008). Statistics in brief: The Importance of
sample size in the planning and interpretation of medical research. Clinical
Orthopaedics and Related Research, 466 (9), 2282-2288.

Birner, R., Davis, K., Pender, J., Nkonya, E., Ponniah, A., Ekboir, J., . . . Cohen, M.
(2009). From best practice to best fit: A framework for designing and
analyzing pluralistic agricultural advisory services worldwide. Journal of
Agricultural Education and Extension, 15(4), 341–355.

Birol, E., Karousakis, K and Koundouri, P. (2006). Using economic methods and tools
to inform water management policies: A Survey and critical appraisal of
available methods and an application. Science of the Total Environment, 365
(1–3), 105-122.

Blamey, R., Common, M and Quiggin, J. (1995). Respondents to contingent valuation

surveys: Consumers or citizens? Australian Journal of Agricultural
Economics, 72(3): 381-396.

Bonnie, J. (2009). Right to Nature. In S. Hanna, F. Carl and K. Makler, Ecological,

Economic, Cultural and Political Principles of Institutions for the
Environment. Washington: Island Press. https://www.amazon.com/ Rights
...Ecological-Institutions Environment /dp/155963490...
Boyer, K. and Polasky, S. (2004). Valuing urban wetlands: A Review of non-market
valuation studies. Wetlands, 24(4), 744-755.

Boyle, K., Johnson, F., McCollum, D., Desvousges, W., Dunford, R. and Hudson, S.
(1996). Valuing public goods: Discrete versus continuous contingent-
valuation responses. Land Econ., 72(3): 381-396.

Briscoe, J. (2015, May 1). Water as an economic good, the idea and what it means in
practice. Retrieved from http://jzjz.tripod.com/icid16.html

76
Broberg, T. (2014). Relative Income and the WTP for Public Goods {A Case Study of
Forest Conservation in Sweden, Sweden: CERE Working Paper 2014: 6.
Available online at https://papers.ssrn.com/sol3/papers cfm? abstract_id

=2532988

Brouwer, R. and Spaninks, F. (1997). The Validity of transferring environmental

benefits: further empirical testing. Norwich: Centre for Social and Economic
Research on the Global Environment. Available online at https://link.
springer.com/article/10.1023/A :1008377604893

Buckley, E. and Croson, R. (2006). Income and wealth heterogeneity in the voluntary
provision of linear public goods. Journal of Public Economics, 90(45), 935-
955.

Cameron, T. A. (1992). Non-user resource values. Journal of Agricultural Economics,

44(2), 299-321.

Carson, R., Groves, T. and Machina, M. (2000). Incentive and information properties
of preference questions. Stated preference. What do we know? Where do we
go. Proceedings session one; Theory and design of stated preference (p. 80).
EPA's NCEE and ANCER. Available online at https://www.oecd.org/dev

/pgd/46839653.pdf

Chavula, G. (1999). The Potential of using community-based small-earth dams for

irrigation development, Regional Consultation - Africa/Middle East on Large
dam & their alternatives, Cairo, Egypt. Water Resources Management,
21(5),883 - 895.

Chipofya, V., Kainja, S. and Bota, S. (2009). Policy harmonization and collaboration
amongst institutions – a strategy towards sustainable development,
management and utilization of water resources: case of Malawi. Desalination,
248, (1-3), 678-683.

Common, M., Bull, T. and Stoeckl, N. (1999). The travel cost method: An Empirical
investigation of Randal's difficulty. Australian Journal of Agricultural and
Resource Economics, 44(2): 299–321.

77
Costanza, R., Darge, R., De Groot, R., Farber, S., Grasso, M., Hannon, B. and et al.
(1997). The Value of the World's Ecosystem Services and natural capital.
Nature, 387(6630), 253-260.

Cox, D. and Snell, E. (1989). Analysis of binary data (2nd ed). London: Chapman &
Hall. Available online at https://www.amazon.co.uk/Analysis- Chapman

-MonographsStatistics.../0412306204

Curtis, J. and McConnell, K. (2002). The citizen versus consumer hypothesis:

Evidence from a contingent valuation survey. Australian Journal of
Agricultural and Resource Economics, 46 (1) 69-83.

Christoplos, I. (2010). Mobilization the potential of rural and agricultural extension.

Rome, Italy: Food and Agricultural Organization (FAO). Available online at
www.fao.org/docrep/012/i1444e/i1444e00.pdf

Darling, A. (1973). Measuring benefits generated by urban water tanks. Land

Economics, 49 (1) 1- 22.

De Groot, R., Wilson, M. and Boumans, R. (2002). A Typology for the classification,
description and valuation of ecosystem functions, goods and services.
Ecological Economics, 41 (3), 393-408.

Department of Fisheries. (2015). Annual Fish Catch Report. Lilongwe: Department

of Fisheries. Available online at www.agriculture.gov.mw/Profiles/Fisheries.
pdf

Derrin, D. and Gartside, D. F. (2001). Challenges for economic policy in sustainable

management of marine natural resources. Ecological Economics, 36 (2), 223–
236

Dinar, A. (2003). The Potential economy context of water-pricing reforms. In P.

Koundouri, P. Pashardes, T. Swanson, & A. Xepapadeas, The Economics of
Water Management in Developing Countries (pp. 15-40). UK: Edwards Elgar
Publishing, Inc.

Eggert, H. and Olsson, B. (2009). Valuing multi-attribute marine water quality.

Marine Policy, 33 (2) 201–206.

78
European Science Foundation (ESF). (2007). Impacts of climate change on the
European marine and coastal environment ecosystems approach. Marine
Board Position Paper 9. Available online at archives.esf.org publications/
/marine-sciences.html

Faraji, E., and Mirdamadi, S. (2002). Assessing the role of extension in adoption of
the insurance by apple producers in the Damavand area. J Agric Sci, 12(3),
489–500.

FAO. (1999). Poverty alleviation and food security in Asia: Land resources. Bangkok,
Thailand: Food and Agricultural Organization, Regional Office for Asia and
the Pacific. Available online at www.fao.org/asiapacific/about/en/

FAO. (2004). Economic valuation of water resources in agriculture. Rome: FAO.

Available online at ftp://ftp.fao.org/agl/aglw/docs/wr27e.pdf

FAO. (2007). Land and water development division AQUASTAT survey 2005.
Available online at www.fao.org/nr/water/aquastat/countries/malawi_cp.pdf.

Ferrira, M. L. (1996). Poverty and inequality during structural adjustment in rural

Tanzania. Policy research working paper No.1641. Washington DC: World
Bank. Available at citeseerx.ist.psu.edu/viewdoc/download? doi=10.1.
1.17.180 &rep=rep1&type

Freeman, A. M. (2003). Economic Valuation: What and Why. In P. Champ, K. Boyle

and T. Brown, Primer on Non-Market Valuation (pp. 1–26). Amsterdam, The
Netherlands: Kluwer Academic Publisher.

Fujihara, Y., Tanaka, K., Watanabe T and Nagano, T. (2008). Assessing the impacts
of climate change on the water resources of the Seyhan River Basin in Turkey:
Use of dynamically downscaled data for hydrologic simulations. Journal of
Hydrology, 3(53), 33– 48.

George, D and Mallery, P. (2016). IBM SPSS Statistics 23 Step by Step: A Simple
guide and reference, 14th edition. Abingdon Park, UK: Tylor and Francis
Limited. Available online at https://www.amazon.com/IBM-SPSS-Statistics-
Step-Reference/dp/0134320 255

79
GOM. (2004). National Water Policy. Lilongwe: Malawi Government, Department
of Water Resources. Available online at www.gsfmalawi.org fil1
/National%20/ Water%20 Policy%20FINAL.pdf

Government of Malawi (1996). Environmental Management Act, Lilongwe.

Available online at https://cepa.rmportal.net/.../government. /Environmental

. %20Management %20Act%2.

Government of Malawi. (1997). The Forest Act, Department of Forestry, Lilongwe.

Available online at www.ndr.mw:8080/xmlui/bitstream/handle/.../Forest .
Act%20– %201997.pdf?...

Government of Malawi (2002). Malawi Land Policy. Ministry of Lands and Housing,

Lilongwe. Available online at ww.lands.gov.mw/.../land policies.

/national%20land% 20policy%. 20january%2020.

GoM. (2010). Malawi State of environment and outlook report: Environment for
sustainable economic growth. Lilongwe 3, Malawi: Environmental Affairs
Department. Available online at www.undp.org/./malawi//enviroment....
/Malawi%20State%20of%20the%20En viron

GoM. (2017). Demographic and health survey 2015-2016. Zomba, Malawi: National
Statistics Office. Available online at https://dhsprogram.com
/pubs/pdf/FR319/FR319.pdf

Guffey, D. (2012). Hosmer-Lemeshow goodness-of-fit test: Translations to the Cox

Proportional Hazards Model (MSc thesis). University of Washington,
Washington. Available online at https://digital.lib. washington.edu
/.../bitstream /.../Guffey_ washington_0250O_11143.pd

Gujarati, D. (1999). Essentials of econometrics. Boston, USA: Irwin/McGraw-Hill,

Available online at https://www.amazon.com/Essentials- Econometrics-
Damodar- N- Gujarati/.../00733758

Gujarati, D. (2004). Basic Econometrics (4th ed.). New Delhi, India: Tata McGraw-
Hill Publis. Available at www.sciepub.com/reference/85416

80
GWA. (2003). Gender Perspectives on policies in the water sector. Delft: Gender and
Water Alliance. Available online at genderandwater.org/.../gwa.../gender-
perspectives-onpolicies-in-the-water-sector/vie.

GWP. (2000). Towards water security: A framework for action to achieve the vision.
Stockholm, Sweden: Global Water Partnership. Available onlline at
www.gwp.org/globalassets/global/.../towards-water-security.-a-framework-
foraction. -m...

Haab, T. and McConnell, K. (2003). Valuing environmental and natural resources:

The econometrics of non-market valuation. Cheltenham, UK: Edward Elgar.
Available at https://www.amazon.com/Valuing-Environmental-Natural-
Resources-Econometrics/...

Hanemann, M. (2005). The Value of water. California: University of California.

www.ctec.ufal.br/professor/vap/Valueofwater.pdf

Hanley, N., Bell, D. and Alvarez-Farizo, B. (2003). Valuing the benefits of coastal
water quality improvements using contingent and real behavior.
Environmental and Resource Economics, 24 (3), 273–285.

Hardin, G. (1968). The tragedy of the commons. 162SCI.1243, 1244. Available at

https://www.sciencemag.org/site/feature/misc/webfeat/sotp/pdfs/162-3859-
1243.pdf

Harun, R., Muresan, I., Arion, F. H., Dumitras, D. and Lile, R. (2015). Analysis of
factors that influence the willingness to pay for irrigation water in the
Kurdistan Regional Government, Iraq. Sustainability, 7, 9574-9586;
doi:10.3390/su7079574.

Hilbe, J. M. (2009). Logistic Regression Models. Chapman & Hall/CRC Press.

Available online at https://www.crcpress.com/Logistic-Regression-
Models/Hilbe/p/book/9781138106710

Hirji, R., Johnson, P., Maro, P. and Chiuta, T. M. (2002). Defining and mainstreaming
environmental sustainability in water resources management in Southern
Africa. Maseru/ Harare/ Washington DC: SADC, IUCN, SARDC, World
Bank

81
Hofmeyr, A. and Visser, M. (2007). Income inequality, reciprocity and public good
provision: An experimental analysis, South African Journal of Economics,
75(3), 508-520.

Hosmer, D. and Lemeshow, S. (1980). A goodness-of-fit test for the multiple logistic
regression model. Communication in Statistics, 9(10), 1043-1069.

Hosmer, D., and Lemeshow, S. (1989). Applied logistic regression. New York: Wiley
Sons. Available online at www.wiley.com› Home › Mathematics & Statistics

› Regression Analysis

International Business Machines Corporation (2011). IBM SPSS Statistics for

Windows, Version 20.0. Armonk, NY: IBM Corp. Available online
at www sciepub com/reference/159832
International Conference on Water and the Environment (ICWE) (1992). The Dublin
statement and report of the conference. International Conference on water and
the environment. Geneva: World Meteorological Organization. Available
online at www.wmo.int/pages/prog/hwrp/documents/english/icwedece.html

Intergovernmental Panel on Climate Change (IPCC), (2007). Climate Change 2007:

Synthesis Report, Intergovernmental Panel on Climate Change. Cambridge:
Cambridge University Press. Available online at https://www.ipcc.ch/pdf

/assessmentreport/ar4/wg2/ar4_wg2_full_report.pdf

International Union for Conservation of Nature (IUCN), (2002). Can Lao PDR afford
not to invest in conserving its biodiversity; Exploring the need for innovative
financial mechanisms. Vientiane, Laos: The World Conservation Union.
Available online at www.selfpas.it/libreria/IUCNPAFinance-040805.pdf

James, S., and Barton, H. (2010). Environmental Law and Policy (3rd ed.). Thomson
Reuters, Available online at https://www.ajol.info/index.php/mlr/ article

/viewFile/108308/98127

Jamu, D., Banda, M., Njaya, F., and Hecky, R. E. (2011). Challenges to sustainable
management of the lakes of Malawi,”. Journal of Great Lakes Research, 37
(1), 3–14.

82
Jayasiri, H., and Rajapaksha, J. (2000). Salt and water balance in the Mundel Lake: A
strongly choked lagoon, Sri Lanka. Journal of the National Aquatic Resources
Research and Development Agency, 36 (200), 12-25.

Jiang, H. Y., and Wen, Y. L. (2011). Based on the WTA wetlands surrounding
farmer’s willingness to compensation and influencing factors research.
Retour. Retour. Environ. 2011 (20) 489–494

Johnson, E., Moran, D., and Vintner, A. (2008). A framework for valuing the health
benefits of improved bathing water quality in the River Arvine catchment.
Journal of Environmental Management, 87 (4), 633-638.

Kanyoka, P., Farolfi, S., and Morardet, S. (2008). Households preferences and
willingness to pay for multiple use water services in rural areas of South
Africa: An analysis based on choice modelling. Water SA, 36(4), 715-724.

Kapanda, K., Matiya, G., Ng’ong’ola, D., Jamu, D., and Kaunda, E. (2005). A logit
Analysis of Factors Affecting Adoption of fish Farming in Malawi: A case
study of Mchinji Rural Development. Journal of applied Sciences, 5(8), 1514-
1517.

Kennish, M., and Paerl, H. (2010). Coastal lagoons critical habitats of environmental
change. Boca Raton, Florida, United States, CRC Press. Available online at
www.sisal.unam.mx/.../Coastal%20Lagoons%2020Critical%20%20Habitats
%20of.

Kirsten D.S (2005). Economic Consequences of Wetland Degradation for Local

Populations. Ecol. Econ 2005(53): 177–190.

Kidane, H., Alemu, Z. G., and Kundhlande, G. (2005). Causes of household food
insecurity in Koredegaga peasant association, oromiya zone. Ethiopia:
Agrekon. Available online at https://ideas.repec.org/p/ags/aaaeke/9540.html

Kjerfve, B. (1994). Coastal Lagoons. In B. Kjerfve, Coastal Lagoon Processes (pp.

1-8). USA: Elsevier Oceanography Series, 60.

Knight, J., Weir, S., and Woldehanna, T. (2003). The role of education in facilitating
risk-taking and innovation in agriculture. Journal of Development Studies, 39
(6), 1–22.

83
Konnings, A. (1995). Malawi Cichlids in their natural habitat. St. Leon-Rot, German:
Cichlid Press. Available online at https://www.abebooks.co.uk/book-
search/.../malawicichlids-natural-habitat/.../koning...

Kopa, T. (2007). Irrigation Livelihoods Heterogeneity and Water Resource

Management: A Study of Bua Watershed in Nkhotakota, Central Malawi,
(MSc thesis). Norwegian University of Life Sciences, Oslo, Norway.
Available online at www.umb.no /statisk/noragric/publications/.../2007
_tawina_jane_joseph_kopa.pdf

Kumar, R. (2010). Assessing ecosystem services of Chilika. Chilika Newsletter,

30(6) 17–18.

Lee, C., and Han, S. (2002). Estimating the use and preservation values of national
parks’ tourism resources using a contingent valuation method. Tour. Manag,
23 (5), 531–540.

Leeworthy, V., and Bowker, J. (1997). Non-market economic user values of the
Florida. Key West. U.S: Department of Commerce/NOAA/National Ocean
Service/Office of Ocean Resource Conservation and Assessment/ Strategic
Environmental Assessment Division.

Little, D. P. (1999). Selling to eat: petty trade and traders in peri-urban areas of Sub-

Saharan Africa. Binghamton, NY: Institute for Development Anthropology.

Available online at www.eldis.org/document/A28602

Loomis, J., Kent, P., Strange, L., Fausch, K., and Covich, A. (2000). Measuring the
total economic value of restoring ecosystem services in an impaired river
basin: Results from a contingent valuation survey. Ecological Economics,
33(1), 103-117.

Lwesya, H. L. (2004). Impact of treadle pump adoption on food security; Kasungu

district, Malawi. Norway: Centre for International Environment and
Development Studies, University of Life Science /master/2004
www.umb.no/statisk/noragric/publications _anna_handrina_lwesya.pdf

Mbo’o-Tchouawou, M., and Colverson, K. (2014). Increasing access to agricultural

extension and advisory services: How effective are new approaches in
84
 reaching women farmers in rural areas? Nairobi, Kenya: International
Livestock Research Institute (ILRI).

Maddala, G. (1983). Limited-dependent and qualitative variables in econometrics.

Cambridge: Cambridge University Press. Available at
public.econ.duke.edu/~vjh3/e262p_07S/.../Maddala_Models_of_Self-
Selectivity.pdf

Madureira, L., Rambonilaza, T., and Karpinski, I. (2007). Review of methods and
evidence for economic valuation of agricultural non-commodity outputs and
suggestions to facilitate its application to broader decision contexts.
Agriculture, Ecosystem & Environment, 120(1), 5-20.

Malawi Government. (1965). Water Resources Act, Cap 73:03, Laws of Malawi.
Zomba: Available online at https://www.malawi.org/mw/consolidated
_legislation/7203

Malawi Government (2005). National Water Policy, Ministry of Irrigation and Water
Development, Lilongwe. Available online at https://cepa. rmportal.net/online.
/ government.at. /National%20Water%20Policy%202 005.../vi...

Makwinja, R., Chapotera, M., Likongwe. P, Banda, J., and Chijere, A. (2014).
Location and roles of deep pools in Likangala River during 2012 recession
period of Lake Chilwa Basin. International Journal of Ecology, 2014, (1) 1-4

Marella, C., and Raga, R. (2014). Use of the Contingent Valuation Method in the
assessment of a landfill mining project. Waste Manag, 34(7):1199–1205.

Matondo, J. P. (2004). Evaluation of the impact of climate change on hydrology and

water resources in Swaziland. Part II Physics and Chemistry of the Earth, 29
(15 -18), 1193 - 1202.

Meinzen-Dick, R., Quisumbing, A., Behrman, J., Biermayr-Jenzano, P., Wilde, V.,
Noordeloos, M., . . . Beintema, N. (2012). Engendering agricultural research,
development, and extension. Washington, DC, USA: International Food
Policy Research Institute.

Griggs, D. and Noguer, M. (2002). Climate change 2001: The scientific basis.
Contribution of Working Group I to the Third Assessment Report of the

85
 Intergovernmental Panel on Climate Change. Weather, 57(8), 267-269. DOI:
10.1256/004316502320517344

McKinney, D., Cai, X., Rosegrant, M., Ringler, C., and Scott, C. (1999). Modelling
water resources management at the basin level: Review and future directions.
Sri Lanka: International Water Management Institute (IWMI). Avail be online
at https://cgspace.cgiar.org/handle/10568/36527

Millennium Ecosystem Assessment. (2005). Ecosystems and Human Well-being:

Wetlands and Water: Synthesis., Washington, D.C: World Resources Institute.
Available online at https://www.millenniumassessment. org/documents/MA_
wetlands%26waterChinese.pdf

Mezgebo, G., and Ewnetu, Z. (2015). Households willingness to pay for improved
water service in urban areas case study from Nebelet town, Ethiopia. Journal
of Development and Agricultural Economic, 7(1), 12-19.

Mitchell, R. C., and Carson, R. T. (1989). Using Surveys to Value Public Goods: The
Contingent Valuation Method; Washington, DC, USA, Resources for the
Future Press. econweb.ucsd.edu/~rcarson/papers/UsingSurveysToValue
Public Goods.pdf

Moldan, D. (2007). Water for food, water for life: A comprehensive assessment of
water management in agriculture. London, UK: Earth scan. Available at
www.iwmi.cgiar.org/assessment/files_new/synthesis/Summary_SynthesisBoo
k.pdf

Mulwafu, W. O., and Nkhoma, B. G. (2001). The use and management of water in the
Likangala irrigation scheme complex in Southern Malawi: Some preliminary
findings 233. Integrated Water Resources Management: Theory, Practice,
Cases (pp. 30-31). Cape Town, South Africa: 2nd WARFSA/Waternet
Symposium.

Mulwafu, W. O. (2000). Conflicts over water use in Malawi: a socioeconomic study

of water resources management along the Likangala River in Zomba District.
Sustainable use of Water Resources. Maputo, Mozambique: WARFSA/Water
Net Symposium.

86
Nagelkerke, N. (1991). A note on a general definition of the coefficient of
determination. Biometrica, 1991(78), 691-692.

Ndebele, T. (2009). Economic Non-Market Valuation Techniques: Theory and

application to ecosystems and ecosystem services. A case study of the
restoration and preservation of Pekapeka Swamp; MSc Thesis. Palmerston
North, New Zealand: Massey University. Available online at https: //mro .
massey.ac.nz/bitstream/handle/10179/1287/02 whole.pdf

Neupane, R. P. (2002). Adoption of agro forestry in the Hills of Nepal: A logistic

regression analysis. Journal of Agricultural Systems 72(3), 177–196

Nise, O. (2005). Human impacts on coastal and near shore ecosystems and
biodiversity: Case studies Ailele, Gagaifolevao, Ma’asinaandta’elefga
Villages of upoluisland, Samoa, MSc Thesis. South Pacific: The University of
the South Pacific Library

Nwankwoala, H. (2012). Case Studies on Coastal Wetlands and Water. European

Journal of Sustainable Development, 1(2), 113-126.

O’Conor, R. M., Johannesson, M. and Johansson, P. (1999). Stated preferences, real

behavior and anchoring: Stated preferences, real behavior and anchoring.
Environmental and Resource Economics, 13(2), 235–248.

O’Neil, J. (1997). Managing without prices: The monetary valuation of biodiversity.

Ambio, 26, (8), 546-550.

Odine, A. T., Shittu, A. M., Ayinde, I. A., and Olubanjo, O. (2011). Assessment of
the economic value of selected wetlands in Southwest, Nigeria. Proceedings
of the Environmental Management Conference (pp. 1-15). Abeokuta, Nigeria:
Federal University of Agriculture.

Oglethorpe, D., and Miliadou, D. (2000). Economic valuation of the non-use attributes
of a wetland: A case-study for Lake Kerkini. Journal of Environmental
Planning and Management, 43(6), 755-767.

Omwenga, R. M. (1995). The Manawatu water quality improvement project. Massey

University, Palmerston North, New Zealand: Unpublished Masters' thesis in
Agricultural Sciences in Resource and Environmental Economics. Available

87
 online at www.tandfonline.com /doi/full/10.1080/11745398. 2011.575047?...
src=recsys

Ostrom, E. (1990). Governing the commons: The evolution of institutions for

collective action. Cambridge, England: Cambridge University Press.
Available online at https://www.amazon.com/Governing-Commons-
Evolution-Institutions-Collective/.../0.

Paris, T. (2002). Crop-animal system in Asia: Social economic benefits and impacts
on rural livelihoods. Agriculture systems, 2002(71), 147-168.

Pearce, D. (2007). Do we really care about biodiversity? Environmental and Resource

Economics, 37(1)313–333

Peng, C. Y., So, T. S., Stage, F. K., and John, E. P. (2002). The use and interpretation
of logistic regression in higher education journals: 1988–1999. Research in
Higher Education, 43(4), 259–293.

Perry, C., Rock, M., and Seckler, D. (1997). Water as an economic good: A solution,
or a problem? Research Report 14. Colombo, Sri Lanka: International
Irrigation Management Institute. Available online at ageconsearch.umn.edu/
bitstream/61113/2/REPORT14.pdf

Peters, N., and Meybeck, M. (2000). Water quality degradation effects on freshwater
availability: Impacts to human Activities. Water International, pp 185-193.
Available online at https://pubs.er.usgs.gov/publication/70022058

Remoundou, K., Koundouri a, P., Areti, K., Nunes, P. D., and Skourtos, M. (2009).
Valuation of natural marine ecosystems: An economic perspective.
Environmental science & policy, 12 (2009) 1040 – 1051 North Georgia April
30, 2008 Selected Paper. Georgia:2008 AAEA Meetings.

Robbins, L. (1935). An essay on nature and significance of economics science.

London, UK: Macmillan. Available online at https://mises.org/files/essay-
nature-and-significanceeconomic-sciencepdf.../download.

Robert, C., Ralph, A., Rudolf, G., Stephen, F., Monica, G., Bruce, H., . . . Jose, P.
(1997). The value of the world’s ecosystem services and natural capital.
Nature, 387 (6630), 253– 260.

88
Rolfe, J., and Bennett, J. (1996). Respondents to contingent valuation surveys:
Consumers or citizens (Blamey, Common and Quiggin, AJAE 39:3)-a
comment. Australian Journal of Agricultural Economics, 40(2)129-133

Schuijt, K. (1999). Economic valuation of the Lake Chilwa wetland state of

environment study no 18. Zomba, Malawi: Lake Chilwa Wetland Project.

Schultz, P. (2005). Productive benefits of improving health: Evidence from low

income countries. Yale, USA: Economic Growth Center Discussion.
Available online at https://books.google.com/books?isbn=9832346819

Sinden, J. (1988). Empirical test of hypothetical bias in consumers ‘surplus surveys.

Australian Journal of Agricultural Economics, 32(2–3): 98–112.

Solanes, M., and Villarreal, F. (1999). The Dublin principles for water as reflected in
a comparative assessment of institutional and legal arrangements for
integrated water resources management. Stockholm, Sweden: Global Water
Partnership. Available online at www.gwp.org/.../04-integrated-water-
resources-management-2000english.pdf

Struip, M., Baker, C., and Oosterberg, W. (2002). The Socioeconomics of wetlands.
The Netherlands: Wetlands International and Riza. Available online at www.
elibrary.cenn.org/Wetlands/T%20Socio-Economics%20of%20Wetlands.pdf

Stynes, D. J. (1990). A note on population distributions and the travel cost method. In
R. L. Johnson, and G. Johnson, Economic valuation of natural resources (pp.
139-149). Boulder: Westview Press. Available online at www.
aquaticcommon.org/14657/1/economicvaluation_natural_resources_web.pdf

Taley, M., and Khadase, V. A. (2006). Communication behaviour attributed by the

farmers in the adoption of micro irrigation systems. 7th International Micro
Irrigation Congress Sept 10-16 2006. Kuala Lumpur.: PWTC.

Tambor, M., Pavlova, M., Rechel, B., Golinowska, S., Sowada, C., and Groot, W.
(2014). Willingness to pay for publicly financed health care services in Central

and Eastern Europe: Evidence from six countries based on a contingent

valuation method. Soc. Sci. Med, 2014(116), 193–201.

89
Tao, Z., Yan, H. M., and Zhan, J. Y. (2012). Economic valuation of forest ecosystem
services in Heshui watershed using contingent valuation method. Procedia
Environ. Sci., 13 (2012), 2445–2450.

Tate, E., Sutcliffe, J., and Conway, D. (2004). Water balance of Lake Victoria: update
to 2000 and climate change modelling to 2100. Hydrological Sciences-
Journal, 49(4), 563-574

Thomson, J. (2006). Malawi's Lake Chiuta fisheries; intelligent burden shedding that
favours renewable resources stewardship. Zomba, Malawi: Chancellor
College. Available online at www.ndr.mw: 8080/ xmlui/ handle/ 123 45 6 789
/532

Todaro, M., and Smith, S. C. (2009). Economic development. Boston: Pearson

Addison Wesley. Available online at https://www.amazon.com/Economic-
Development12th ...Economics/dp/1292002972

Turner, G. (1996). Offshore cichlids of Lake Malawi. Lauenau: Cichlid Press.

Available online at www.rspb.royalsocietypublishing.org/ content/274/1623...
/2249

Turpie, J. K., Barnes, J. I., Arntzen, J. A., Nherera, B., Lange, G. M., and Buzwani,
B. (2006). Economic valuation of the Okavango Delta and implications for
management. Gaborone, Botswana: IUCN. Available online at
www.anchorenvironmental.co.za/... %20Delta %20Valuation%20FINAL%2

Twerefou, D., Ernest, A., and Baffour, O. (2007). Impact of mining sector reforms on
output, employment and incomes, 1992-2002. Lagoon: ISSER Technical
Publication No.75, University of Ghana. Available online at
https://www.researchgate.net/.../291164322Attitudes_of_Local_People_to_
Mining_Pol.

Venkatachalam, L., and Jayanthi, M. (2016). Estimating the economic value of

ecosystem services of Pallikaranai marsh in Chennai City: A contingent
valuation approach: MIDS Working Paper No. 220, Gandhi Nagar: Madras
Institute of Development Studies 79. Available online at.
www.mids.ac.in/wp220.pdf

90
Uematsu, H., and Mishra, A. (2010). Net effect of education on technology adoption
by U. S. farmers. Orlando, FL, Selected Paper prepared for presentation at the
Southern Agricultural Economics Association Annual Meeting. Available
online at https://www.researchgate.net/.../254388799_Net_Effect_of_Educa..
tion _on Technology.

Wang, C. H., Cui, L. J., and Mao, X. F. (2012). Wetland ecological compensation area
surrounding farmer’s willingness comparison. Acta Ecol. Sin., 17(32), 5345-
5354

Ward, F. (2007). Environmental and natural resources economics. Upper saddle

River: Pearson Prentice Hall. Available online at https://www.pearson.com
/.../Ward-Environmental and-Natural-Resource-Economics/.

Wattage, P., and Mardle, S. (2007). Total economic value of wetland conservation in
Sri Lanka Identifying use and non-use values. Wetlands Ecology and
Management, Original paper. Available online at https://www.researchgate
.net/.../226397923_Total_economi c _value_of_wetland_conser...

Wedathantrige, H., Amarasiri, C., and Fernando, C. (2013). Boosting incomes of fisher
households in Negombo, Sri Lanka through handicraft Production. Rome,
Italy: Food Agriculture Organization. Available at www.fao.org/3/a
ar492e.pdf

Wellman, B., and Frank, K. (2001). Network capital in a multi-level world: Getting
support in personal communities. In N. Lin, K. Cook, & R. Burt, In Social
Capital Theory and Research (pp. 233-273.). Chicago, Illinois: Aldine
DeGruyter.

Wheeler, S., and Damania, R. (2001). Valuing New Zealand Recreational fishing and
an assessment of the validity of the contingency valuation estimates. The
Australian Journal of Agriculture& Resource Economics, 45(4), 599-621.

Xiong, K. and Kong, F. (2017). The Analysis of Farmers’ Willingness to Accept and
Its Influencing Factors for Ecological Compensation of Poyang Lake Wetland.
Procedia Engineering, 174 (2017), 835 – 842.

91
Zhongmin, X., Guodong, C., Zhiqiang, Z., Zhyong, S., and Loomis, J. (2003).
Applying contingent valuation in China to measure the total economic value
of restoring ecosystem services in Ejina Region. Ecological Economics, 44(2-
3), 345-358.

Zimba, G. M., and Kaunda, C. (1999). Health hazards of the Lake Chilwa wetland
and catchment. State of the Environment Study No. 19. Zomba, Malawi: Lake
Chilwa Wetland Project.

Zimmer, D. Renault, D (2003) Virtual water in food production and global trade:
review of methodological issues and preliminary results. Available at: http://
citeseerx.ist.psu.edu/viewdoc/download? doi=10.1.1.435.717&rep=rep1&
type =p df

Zuze, S. (2013). Measuring the economic value of wetlands ecosystem service in

Malawi: A Case study of Lake Chiuta wetland, (MSc thesis). University of
Zimbabwe, Harare. Available online at ir.uz.ac.zw/.../ UZ_IWRM_ ZUZE_
2012-2013_Final% 20Thesis% 20Document_Dec_1...

92
 APPENDENCES

APPENDIX 1: ANNUAL FISH CATCHES (METRIC TONE) AND ANNUAL REVENUE (MK)

Total fish catch (metric ton) from Chia lagoon waters from 2009 to 2015
Chambo O/tilapia Kambuzi Utaka Chisawasawa Kampango Mlamba Sanjika Mcheni Mbaba Others Total
SPP
2009 1.50 5.66 0.32 1.32 0.26 0.83 6.86 6.80 6.50 3.60 12.40 46.05
2010 1.80 17.19 10.61 4.02 0.16 1.30 15.90 8.40 0.30 4.20 11.80 75.68
2011 0.90 5.20 8.40 1.03 0.42 0.62 12.00 4.80 4.20 0.50 10.00 48.07
2012 0.50 8.10 3.20 0.03 0.32 3.80 7.20 5.50 1.60 20 3.00 35.25
2013 0.32 8.60 6.50 0.02 0.26 4.30 2.10 7.40 2.30 3.20 5.50 40.50
2014 0.16 6.50 3.80 0.04 0.20 3.40 1.40 5.20 2.80 4.00 7.00 34.50
2015 0.02 6.70 2.50 0.80 0.18 2.10 8.60 8.30 3.40 1.00 5.30 38.90
Source: Department of fisheries (DOF)
Annual revenue expressed in Million Malawi Kwacha (MK) generated from Chia lagoon fishery from 2009 to 2015
Year Chambo O/tilapia Kambuzi Utaka Chisawasawa Kampango Mlamba Sanjika Mcheni Mbaba Others Total
2009 2.23 0.67 0.13 0.78 0.23 6.58 5.79 4.04 5.44 2.01 6.18 2,816.09
2010 2.68 2.04 4.20 2.39 1.43 1.03 13.41 4.99 0.25 2.34 5.89 3,936.74
2011 1.34 0.62 3.33 0.61 3.76 4.91 10.12 2.85 3.51 0.28 4.99 285.17
2012 0.74 0.96 1.27 0.02 2.86 3.01 6.07 3.27 1.34 1.11 1.50 195.79
2013 0.48 1.02 2.57 0.01 2.33 3.41 1.77 4.40 1.92 1.78 2.74 203.42
2014 0.24 0.77 1.27 0.02 0.18 2.69 1.18 3.09 2.34 2.23 3.49 177.45
2015 0.03 0.80 2.57 0.48 0.16 1.66 7.25 4.93 2.84 0.56 2.64 223.46
MK 733.5 = US$ (National Bank of Malawi (NB)) exchange rate, December, 2016

93
 APPENDIX II: ESTIMATION OF CORRELATION MATRIX
Correlation matrix for demographic variables
WTP GH AGH CS LL HS
WTP 1.00
GH -0.06 1.00
AGH -0.19 0.14 1.00
CS -0.12 0.00 0.04 1.000
LL -0.07 0.04 -0.05 -0.13 1.00
HS -0.03 -0.03 0.21 -0.06 0.02 1.000
GH=gender of the household head, AGH= age of the household head, CS=civil status, LL=literacy
level, HS=household size

Correlation Matrix for socio economic variables

Constant LMSI LMSW LO FLP AGL PILP AFGL DBLP
Constant 1.00
LMSI -0.02 1.00
LMSW -0.19 0.26 1.00
LO -0.14 0.19 -0.14 1.00
FLP -0.04 -0.21 -0.05 -0.23 1.00
AGL -0.35 0.23 0.13 0.27 0.11 1.00
PILP -0.19 -0.23 -0.08 -0.03 0.45 -0.30 1.00
AFGL -.06 -0.13 -0.02 -0.09 0.01 -0.01 .046 1.00
DBLP 0.02 -.020 -0.01 -0.01 -0.03 -0.05 .006 -0.17 1.00
HALI 0.12 0.03 0.12 0.05 0.05 -0.01 0.04 0.28 0.06 1.00
LMSI=Lagoon main source of income, LMSWA= Lagoon main source of water for agriculture,
LOS=Land ownership, FLP=Farm in the lagoon periphery, AGL=Access to grazing lands,
PIF=Practice irrigation farming using water from the lagoon, AFGLW =Access to food
gathering from lagoon waters, DBLP= Does business in the lagoon periphery,
HALI=Household annual level of income

Matrix for institution variables

CONSTANT HST WRCCESNI AEFS IT KWDD WRPDH AEXTS KKWRUR AIIWRM
CONSTANT 1.00
HST -0.02 1.00
WRCCESNI -0.05 -0.26 1.00
AEFS -0.09 -0.24 -0.11 1.00
IT -0.31 -0.12 0.14 0.02 1.00
KWDD -0.23 -0.07 -0.22 0.39 -0.15 1.00
WRPDH -0.31 -0.03 -0.29 0.30 -0.18 0.14 1.00
AEXTS -0.39 0.00 -0.16 0.06 0.09 -0.19 0.04 1.00
KKWRUR -0.01 -0.16 0.03 0.15 0.14 -0.14 0.09 0.39 1.00

AIIWRM -0.04 0.05 -0.12 0.02 0.03 -0.09 -0.03 -0.05 0.03 1.00
ST= Household ‘social trust, WRCCESNI= Water Resources Conservation Civic education and social networking
involvement, AEFS= Access to external financial support, IT= Institution trust, KWDD= Knowledge of water
resources degradation and depletion, WRPDH= Water resources problem directly affect the household,
AEXTS= Access to extension services, KKWRUR= Knowledge on water resources user rights, AIIWRM=
Access to information on Integrated water resources management

94
 APPENDIX II: HOUSEHOLD QUESTIONNAIRE

UNIVERSITY OF MALAWI, THE POLYTECHNIC

THE FACULTY OF APPLIED SCIENCES, DEPARTMENT OF PHYSICS AND BIO-

CHEMICAL SCIENCES

ASSESSMENT OF ECONOMIC VALUE OF WATER RESOURCES

(A case study of Chia lagoon, Nkhotakota, Malawi by Rodgers Makwinja)

My name is ______________, I am one of the data collectors in this study. The study is
intended to assess the economic value of water resources at Chia lagoon. I would like you to
answer some personal questions. Your answers are completely confidential and participation
is voluntary. No one will be told what you said in connection to your name. You don’t have to
answer any question if you do not want to and you can stop the interview at any time. However,
your honest answer to these questions will help us to better understand the water resources
situation at the lagoon which will help to improve its status. The information will be presented
to the policy makers to make well informed decisions on the management and conservation of
the water resources at the lagoon. I will greatly appreciate your help in participating in this
study. Would you be willing to participate?

General Particulars
A. Name of village: _____________________________________________________
B. Name of District: ____________________________________________________
C. Name of Interviewer: _________________________________________________
D. Name of respondent: ____________________________________________________
E. Date of Interview: _____/dd______/mm________/yy

95
Section 1: Estimate the total economic value accruing from water resources at the
lagoon
Ask the household head the sources of income during the past years.
Source of income Income earned Income earned
during last during last
month(MK) year(MK)
1.Fishing
a. sale of fish
b. sale of fishing gear and fishing craft
c. casual employment in fishing activities
2. Farming (around Chia lagoon)
a. rain fed
b. irrigation
c. sales of food crops
d. sale of fruits and vegetables
e. casual employment in farming
activities
3.Livestock (grazing around the lagoon)
a. sales of livestock
b. sales of livestock products
4. Off farm activities (around Chia lagoon)
a. petty trade
b. business (not fisheries or agriculture)
c. wages
d. other employment
e. income from other activities taking
place around the lagoon waters

i. What was the quantity and value of fish caught from the lagoon waters using each of
the following gears? (note list of fishing gears below was adapted from fishery 2015
annual frame survey)

96
ii.
Type of gear species Quantity (last year) Values (MK) (last year)
Gill net
Chilimira
Beach seine
Mosquito net
Fish traps
Reed fence
Hand line
Long line
Other (specify)

Section 2: Estimation of willingness to pay (WTP) in order to improve the status

of water resources at the lagoon

Section A: Estimation of willingness to pay

i. “I would like to show you a list of possible problems that you might be experiencing
at the lagoon? Of these possible problems, which one do you consider the most
serious?

iii. Decline in income generated from the lagoon f. Decline in biodiversity

fishery
iv. Water quality degradation g. Decrease in water
levels
v. Decrease in fish catches h. Siltation of the lagoon
vi. Extinction of some fish species (Ntchira, Chambo i. Loss of scenic beauty
etc)
vii. Invasion of some alien species (water hyacinth) j. Frequent flooding

ii. If the problem mentioned in (i) is not corrected, what will be the situation like at this
lagoon in the next five years?

97
 0=very serious 1= somewhat serious 3= Not serious
4=don’t know

i. Analysis of indirect economic value of the lagoon water resources. Ask the household
how it values the lagoon water resources in terms of the following attributes
Scenic view 0=good 1=poor
Distance of the lagoon to the household 0=short 1=long
Access to transport and communication 0=good 1=poor
Access to entertainment 0=good 1=poor
Access to resources from the lagoon waters 0=good 1=poor
Is the market located to the lagoon periphery 0=yes 1=no
Is the lagoon main source of water for agricultural 0=yes 1=no
activities
Number of trips made by tourists to the lagoon 0=good 1=poor
Lagoon as the main source of income 0=yes 1=no

Suppose the Ministry of Agriculture, Irrigation and Water Development has started a program
called “Lagoon water resources conservation”. This program would provide funding to the
community based organization in terms of operational costs and recurrent management cost for
lagoon water resources conservation. If this program is implemented, it will improve water
quality, increase water resources, maintain biodiversity and protect endangered species.
However, implementing this program will require a large amount of funding, and
unfortunately, the authorities do not have enough money. Therefore, we would like to hear
your opinion.

ii. Will you be willing to pay towards the proposed program?

0= yes 1=No
iii. If ‘yes’ how much will you be willing to pay (WTP) for this Lagoon water
resources
conservation program? ……………...MK(US$)/month for 5 years.

98
iv. If ‘yes’ what is your main reason for paying to this program? (choose one answers)
1. Improve status of water resources to maintain biodiversity and protect
endangered species in the lagoon waters
2. Can mitigate climate change
3. Contribute money to authorities with budget constraints to protect water
resources at the lagoon
4. Indirect benefits conserving lagoon water resources are high This statement is
not very clear
5. This initiative can lead to more protection of water resources at the lagoon
6. Other
reason………………………………………………………………………...

v. If ‘no’ what is the main reason for not paying for this program? (choose one
answer)
1. Declining biodiversity and endangering of species as the result of water
resources degradation at Chia lagoon is a minor problem for me
2. Do not have money, other expenditures are high
3. Someone else (Malawi government) should pay
4. Someone else (Fishermen-who benefit from lagoon waters) should pay
5. Do not have confidence in the implementation of this project
6. Do not have confidence that this project will happen
7. Other reason……………………………………………………
Section B. Analysis of current status of water resources at Chia lagoon
1. In 10 years ago, how long could the quality of water resources at the lagoon remain clear
in a year?
0= Year around 1 = More than six months 2 =Within six months
3= Less than six months 4= Less than three months 5= Not even a month
2. Currently (refer to Q1), how long does the quality of water resources remain clear in a
year?
0= Year around 1 = More than six months 2 =Within six months
3= Less than six months 4= Less than three months 5= Not even a month

99
3. Which of the following factors significantly contribute to water quality degradation in the
lagoon?
0= animal waste 1= Household waste 3= upland agricultural activities
4=agricultural activities taking place in the lagoon periphery 5= others……………
4. If you were to categorise the quality of water resources in the last 10 years, which of the
following categories could you classify it?
0= above V category (water pollution is very serious)
1= within IV and V categories (water pollution is serious)
2 = Below IV category (water pollution is not serious)
5. Do you think that decline in fish catches from the lagoon is significantly contributed to
water quality degradation?
0= yes 1= No
6. In your opinion, do you think that the current status of water quality at the lagoon has
any serious implication on your health?
0= yes 1= No
7. For the past 10 years, have you noted any decline in biodiversity in the lagoon as the
result of water quality degradation?
0= yes 1= No
8. If yes (refer to Q 7), does that affect your level of income in any way possible?
0= yes 1= No

Section 3: Analyse factors that influence the willingness to pay in order to improve
the status of water resources at the lagoon

a. Household (socio-demographic) factors

QUESTION

1 Sex of the respondent? 0=male 1= female

2 Age of the respondent? 0=below 40 1= above 45
3 Marital Status of the respondent? 0= single 1= married
4 Educational level of the respondent? 0 = literate 1= illiterate
1. Farmer 2. Housewife
3. Merchant 4. Labourer
5 Occupation of the respondent?
5. Government 6. fisherman
7. Other(specify)_________
100
 6 Household size of the respondent? 0= below 4 1=above 4

b. Social-economic factors
What are 1= farming, 2=fishing, 3=grazing Do you own land 0=yes
your main animals 4=others near the lagoon? 1=no
economic (specify……………............................)
activities in
the lagoon?
Do you farm 0=yes 1=No Do you farm all 0=yes
near the the land you own 1=no
lagoon? near the lagoon?
What do you 1= rents it to others, 2=use it for animal Do you practice 0=yes
do with the grazing, 3= as fallow 4= stays idle, irrigation farming 1=no
land you own 5=others specify using water from
near the the lagoon?
lagoon and
do not farm?
Do you have 0=yes 1=no Have you ever 0=yes
access to gotten any food 1=no
grazing land out of gathering
near the from the lagoon?
lagoon?
If ‘yes’ is 0=communally owned 1=my own How do you rate 0=
this land the quality of the excellent
communally grazing land? 1=good
owned or 2=fair
your own? 3=poor
4=worse
Are you 0=yes 1=No Do you do any 0=yes
currently business around 1=no
involved in the lagoon?
fishing?
Do you own 0=yes 1=no What is your 0=below
fishing monthly MK15000,
gears? household total 1=above
income? MK15000

101
 c. Institution factors
Does the household have
knowledge on water
degradation and
depletion situation at
Chia lagoon?
Does the household have
ever heard anything
about IWRM?
Does the household
frequently receive
extension services?
Does the household have
knowledge on the water
user rights?
Does the water resources
problems at Chia lagoon
directly affect you?
View publication stats
0=yes 1=no Does the household have 0=yes 1=no
access to water resources
conservation civic education
and social networking?
0=yes 1= no Does the household have a 0=yes 1=no
trust in the community
governance structures at the
lagoon (social trust)
(VNRMC, VDC, ADC,
BVC)?
0=yes 1=no Do the local governance 0=yes
committees at Chia lagoon 1=no
receive external financial
support?
Does the household have trust 0=yes 1=no
in the government to
implement water resources
conservation program?
END OF QUESTIONS
102