ECONOMICS UNIQUENESS

32 ■ THE ECONOMICS OF UNIQUENESS
perils of preservation may claim that the benefi t function is concave, as renovation
eff orts are bound to suff er from decreasing returns at some point. In the
end, whether B is convex or concave over the range of 1 to n + 1 buildings with
architectural value preserved is an empirical issue, one that it could be very diffi
cult to settle in practice. In what follows, to preempt any suspicion of cultural
bias, it is assumed that those concerned with the perils of preservation are right.
In fi gure 2.4, B is thus represented as a concave function of the number of buildings
preserved. But even with this assumption, partial or even total renovation
can still be the socially optimal decision.
FIGURE 2.4
Factors Determining the Optimal Extent of Renovation
A. Situation when saving one landmark leads to only small gains
in overall value of the area, and renovating other buildings
with architectural value leads to even smaller gains
B, C
U + I
No renovation
0
Units
renovated
B. Situation when saving the landmark leads to large gains
in overall value to the area, but renovating other buildings with
architectural value only contributes marginally
B, C
U + I
Partial renovation
0
1
1
k + 1
n + 1
n + 1
U + R + I
ΔH + ΔV
U + R + I
ΔH + ΔV
Units
renovated
(continued next page)