Willingness to participate in a cocoa pension scheme in Ghana: An application of discrete choice experiment

Studies on involuntary pension participation in general and among farmers, in particular, are scanty. Therefore, this paper aims at investigating cocoa farmers' awareness of pension schemes as well as assessing their willingness to participate in a cocoa pension scheme. A sample of 450 cocoa farmers were interviewed using a structured questionnaire. The discrete choice experiment (DCE) comprising conditional logit (CL) and random parameter logit (RPL) models were used to analyse farmers' willingness to pay for pension schemes. From the study, only 43 percent of farmers were aware of the cocoa pension scheme. The results of DCE analysis revealed that farmers' decision and willingness to pay for pension scheme were influenced by the scheme attributes such as premium, payment period, payment method and pension pay. For pension institutions, the revelation that farmers are less likely to participate in a pension scheme that takes longer years to realise the benefits should be crucial in developing schemes for cocoa farmers. Therefore, it is suggested that actuarial calculations should relax the cap for being declared due for pension and reduce the premium payment period for pension benefits.