Why Is It Difficult to Put a Value on Irreplaceable Heritage Assets? Compare Revealed Preference and Contingent Valuation Methods in the Valuation of Such Assets.
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Why is it Difficult to Put a Value on Irreplaceable Heritage Assets?
Compare Revealed Preference and Contingent Valuation Methods in the Valuation of Such Assets.
The process of valuation aims to place a monetary on environmental impact. In this essay I will first outline some core concepts involved within the processes of both Contingent Valuation (CV) and Revealed Preference (RP) methods of valuation. I will then proceed to introduce the CV method, followed by various RP methods. Following on from this will be a comparison of the two types of valuation and ultimately an evaluation of both. An irreplaceable heritage asset refers to a place of huge historical or social importance, a place that some might call a ‘national treasure’. Examples within England include Stonehenge, The Royal Botanical Gardens, The Tower of London and The City of Bath. It should be clear to see that almost anything, from a pile of rocks to an entire city, can be classified as a heritage asset. It should also be clear that the benefits that people draw from these assets are not all the same. Broadly, we can categorise these benefits into ‘use value’ and ‘non-use’ value. The use value is the value which an individual places upon the direct use of a resource, in this case an irreplaceable heritage asset. Non-use values “measure aspects of the resource 's value to individuals which are not linked to actual resource use by the individual” (Cicchetti and Wilde 1992, p1121). These non-use values are particularly prominent when taken in the context of irreplaceable heritage assets: many people may never want to go and visit Stonehenge or the Tower of London, but if these sites were destroyed people would incur some disutility from the notion that perhaps these assets benefited the nation as a whole, and as a result national pride is depleted. Therefore it is vital to have a precise estimate of the value that society places on heritage assets so as to be able to
Why is it Difficult to Put a Value on Irreplaceable Heritage Assets?
Compare Revealed Preference and Contingent Valuation Methods in the Valuation of Such Assets.
The process of valuation aims to place a monetary on environmental impact. In this essay I will first outline some core concepts involved within the processes of both Contingent Valuation (CV) and Revealed Preference (RP) methods of valuation. I will then proceed to introduce the CV method, followed by various RP methods. Following on from this will be a comparison of the two types of valuation and ultimately an evaluation of both. An irreplaceable heritage asset refers to a place of huge historical or social importance, a place that some might call a ‘national treasure’. Examples within England include Stonehenge, The Royal Botanical Gardens, The Tower of London and The City of Bath. It should be clear to see that almost anything, from a pile of rocks to an entire city, can be classified as a heritage asset. It should also be clear that the benefits that people draw from these assets are not all the same. Broadly, we can categorise these benefits into ‘use value’ and ‘non-use’ value. The use value is the value which an individual places upon the direct use of a resource, in this case an irreplaceable heritage asset. Non-use values “measure aspects of the resource 's value to individuals which are not linked to actual resource use by the individual” (Cicchetti and Wilde 1992, p1121). These non-use values are particularly prominent when taken in the context of irreplaceable heritage assets: many people may never want to go and visit Stonehenge or the Tower of London, but if these sites were destroyed people would incur some disutility from the notion that perhaps these assets benefited the nation as a whole, and as a result national pride is depleted. Therefore it is vital to have a precise estimate of the value that society places on heritage assets so as to be able to
Bibliography: Valuing the Benefits of Cleaning Lincoln Cathedral Pollocino & Maddison : Journal of Cultural Economics25: 131 – 148, 2001 Travel Cost Analysis of a Cultural Heritage Site: The Case of Historic St. Mary’s City of Maryland Poor & Smith: Journal of Cultural Economics 28: 217 – 229, 2004 Contingent Valuation: Is Some Number Better than No Number? Diamond & Hausman: Journal of Economic Perspectives, Volume 8, Issue 4.