The Quest for Fairness: An Empirical Examination of the Determinants of Compensation Satisfaction in Ghanaian Mining Communities

Abstract

This paper examines the determinants of satisfaction of compensation packages in Ghanaian mining communities using survey data and the logit model. The results indicate that an improved and highly improved mining effect on livelihood increases the likelihood of households being satisfied with compensation packages by 19.4 and 24% respectively, while a change in satisfaction with compensation negotiation process from not satisfied to satisfied increases the likelihood of a household being satisfied with compensation package received by 18.8%. Also, a change from low pollution level to moderate or high pollution levels decrease the likelihood of households being satisfied with compensation package received by 9.1% and 11.3% respectively. Furthermore, a change in location from the Obuasi village community to Asutifi, Prestea and Tarkwa village communities increases satisfaction with compensation package by 8.7%, 19.6% and 16.1% respectively. A change in the mean variables will lead to a 14.6 per cent likelihood of a household being satisfied with compensation payment received. We recommend the government to improve compensation negotiation process by educating communities on the compensation regulation. There is a need to economically value assets while strengthening regulatory institutions to enable then properly enforce pollution regulations.