Cultural Heritage Economic Evalutation

Walter SantagataUniversity of Turin

Cultural Heritage as a public good

Considering the public good nature of cultural heritage and of many culture-based goods and services, the problem of its economic evaluation cannot be solved by the price system. The market is unable to assessing the value of the Pyramids, of a museum, a temple or a landscape. Even intangible culture-based goods such as ideas, music, or festival and local fairs can hardly be evaluated by the market mechanism.

Market failure

The main reasons of this failure depend on the fact that there is not a market for a public good, that every one can consume without limitations or exclusion. How can we exclude others from the consumption of an idea ? Or how much does it socially cost to exclude the people from the sight of Petra.

Use and non-use values

Moreover new meanings of economic value are worth to be estimated with reference to cultural heritage. Existence values, option values, bequest values and intergenerational values are not assessed by the price system because are passive-use values, very different from the usual use value that is revealed through supply and demand interaction.

MethodsThus new methods must be developed to asses or estimate the economic value of a cultural public good. The main are

  i.     Hedonic prices           

Methods

ii. Travel cost method

Methods

 iii.     Contingent valuation method

Pros of CVMAn evaluation contingent upon an hypothetical market is a technique very diffuse in environmental economics and in cultural economics. Its success is due both to theoretical arguments ( it is a method able to assess use values and passive use values as well ) and practical reasons ( based on individual interviews and direct revelation of the willingness to pay for cultural heritage, it is easy to apply ).

Case Studies

Many examples illustrate the contingent valuation method.

Museums in Naples

Case Studies

The Medina, Fez

Case Studies

Baroque Cathedrals, Sicily

Case Studies

Collective property rights in San Gregorio Armeno, Italy

References

See for further case studies:

• W. Santagata and G. Signorello, "Contingent Valuation and Cultural Policy Design: The Case of «Napoli Musei Aperti»", in Journal of Cultural Economics, n.24, 2000. 

• Navrud S. and Ready R. (eds.), Valuing Cultural Heritage Applying Environmental Valuation Techniques to Historic Buildings, Monuments and Artifacts, Edward Elgar Publishing, Cheltenham, UK, 2002

• “Journal of Cultural Economics” , Special Issue on Contingent Valuation, Volume 27, Issues 3-4, 2003