Cultural Heritage Economic Evalutation

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					  Cultural Heritage
Economic Evalutation

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

   i.      Hedonic prices
ii. Travel cost method
iii.   Contingent valuation
        Pros of CVM
An evaluation contingent upon an hypothetical
market is a technique very diffuse in
environmental economics and in cultural
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,
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

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