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Do social benefits of preserving built heritage exceed the costs?
Case: Bryggen in Bergen
Ståle NavrudDepartment of Economics and Resource Management
Norwegian University of Life Sciences
E-mail: stale.navrud@umb.no
Contents
• Review of economic valuation studies
of cultural heritage = Social benefits of preservation
• Case:
Cost –Benefit Analysis (CBA) of the World Heritage Site – Bryggen in Bergen, Norway
Review of studies -.Ready and Navrud (eds.) 2002:
Valuing Cultural Heritage
• Mostly Stated Preference techniques used
(Contingent Valuation and Choice Experiments)• Use and Non use – values captured• 27 studies (by 2002); incl. 6 World Heritage sites • Developed/developing/transition countries• Span a wide range of physical assets, services,
quality and policy issues – attempt to classify studies
Lessons learned
i) Few empirical valuation studies
ii) Existing studies vary widely
difficult to compare
iii) People attribute significantly
positive value to CH (Cultural Heritage)
iv) Large proportion state zero WTP
- protesters
- genuine zero funding
Lessons learned (cont.)
v) Higher values for users
vi) Non-users benefits are positive
vii) Competing cultural goods
and Part-whole bias /Embedding
viii) Periodicity of elicited WTP values
iv) Accurate description of good
- match expert assessment and
understandable to people
Conclusion of review
• Experience from environmental valuation apply equally well to CH valuation • Potential for benefit transfer (i.e. transfer of from
study sites to new policy cases) ?Highly site- and project specific values “Book of values” not possible, but there might be similar values for groups of CH goods There is a large need for new valuation studies of cultural heritage for new policy uses
Policy Uses1) Project evaluation (protect/restore)
(e.g. Stonehenge, Split, Fes Medina)2) Level of investment in ongoing projects (e.g. Nidaros and Lincoln Cathedrals)3) Choices between competing uses
(e.g. Nidaros, Stonehenge; new studies of access and deterioration of buildings from access)
4) Decisions on funding mechanisms (Durham Cathedral, Napoli Musei Aperti)
Extent of Market – Number of ”affected” households
• Total benefits (B)
B = bi x N
Number of affected households (N) just as important as mean WTP/household (bi)
- for local, regional, national, global public goods
(i.e. World Heritage site = global public goods)
Case: CBA of Bryggen In Bergen
Benefits:Use Value: 500.000 visitors per yearNon Use Value: • Households (hh) in Bergen and rest of Norway;
Contingent Valuation of national, representative sample of 480 Norwegian households:
Average Willingness-to-pay (WTP) = 188 2003-NOK/hh one-time amount• Households in other countries worldwide could also
have WTP for this gobal good, but small
CBA (cont)
• Costs Restoration program200 – 300 million NOK in total for next 10 years
• Net Present Value (Discount rate r = 4 %, Time horizon = 10-20 y= 80 – 90 million NOK SOCIAL BENEFITS EXCEED COSTS
• Sensitivity:NPV=0 Critical Value for Benefits= 137-145 NOK/hh as a one-time amount
Further reading
• For an introduction to methods to find the
social benefits/economic value of cultural heritage, and an overview of empirical studies; see first and last chapter of Navrud & Ready (2002) at:http://www.nlh.no/ios/Bulletinen/Valuing%20Cultural%20Heritage.pdf
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