ECONOMICS UNIQUENESS

4
Economic Valuation of
Cultural Heritage
Peter Nijkamp
Professor of Regional Economics and Economic Geography,
Free University of Amsterdam (the Netherlands)
This chapter presents an overview of economic valuation methods in the domain
of cultural heritage. After introductory and conceptual observations, a functional
approach to heritage valuation is illustrated. Several issues are similar to environmental
valuation, and a comparison between biodiversity valuation and cultural
heritage valuation is presented. The chapter then looks at various classes of valuation
methods, notably compensation, social cost-benefi t, stated preference, and
revealed preference methods. Compensation methods are linked to the applied
welfare-theoretic methods and seek to fi nd the sacrifi ces and revenues involved
with a change in the availability or quality of a cultural asset. In the cost-benefi t
analysis tradition, a sophisticated toolbox has been developed over the years to
deal with complex project evaluation issues, sometimes with large spillover effects.
Stated preference analysis is essentially rooted in behavioral economics, but in the
past decades it has found extensive application in the case of economic evaluation
of non-market or quasi-market goods, when the essential evaluation concept
centers on the individual willingness to pay. Revealed preference methods focus
on market outcomes derived from real market transactions and include the travel
cost method and the hedonic price method. The chapter argues that despite
some important limitations, the use of hedonic price analysis may be promising for
valuation of cultural heritage. Various applications and empirical illustrations of this
approach are presented as well, followed by concluding remarks.
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