Economic Valuation of a World Heritage Site

ECONOMIC VALUATION OF A WORLD HERITAGE SITE:

CITIZEN’S NON-USE VALUES FOR THE CHURCH OF STO.

TOMAS DE VILLANOVA (MIAGAO CHURCH)

Nasser Domingo & Rowe Roquez

Econ 199.1

BACKGROUND

The Philippines consists of approximately 98 million

citizens; 90% of which are Christians, with about

80% belonging to the Roman Catholic Church (CIA,

2010).

Catholicism is one of the most distinguishing

characteristics of the Filipino people as an influence

of the colonization of the Spaniards. One of the

most notable emblems of the Catholics is their

churches.

Some of these churches have unique architectural

style – an interpretation of European Baroque by

Chinese and Philippine craftsmen, that four

churches were classified as UNESCO World

Heritage Sites in 1993 (UNESCO, 1993).

The four churches include the Church of San Agustin

in Intramuros, Manila; the Church of La Nuestra

Señora de la Asuncion, in Santa Maria Ilocos Sur;

the Church of San Agustin, in Paoay, Ilocos Norte,

and finally; the Church of Santo Tomas de

Villanova, in Miag-ao, Iloilo

The Church of Santo Tomas de Villanueva withstood

the occasional attacks from Muslims coming from

the south. The church and its watchtowers had been

built with thick walls and secret passages to defend

the town and its people. The defensive purpose of

the Church led to the popular name The Miag-ao

Fortress Church (Chemma, 2009).

The research will aim to conduct an economic

valuation of the non-market benefits of maintaining a

UNESCO World Heritage Site and to determine how

people value the said site.

STATEMENT OF THE PROBLEM

There have been very few studies regarding the

valuation of cultural heritage sites, as well as

information regarding as to the effects of such

studies to the present value and treatment of an

existing resource or structure.

Like the valuation of any cultural heritage site, any

individual’s willingness to pay for its conservation

and rehabilitation is affected by various factors.

These factors may affect their WTP in different ways

– positively, negatively or with an unknown direction

of effect. This conundrum may be enlightened by a

detailed profile and survey of the population

affected, evaluated with their willingness to pay.

Being a world heritage site, the Miagao church

should be provided with adequate funding for its

preservation. However, there are very few sources

for these funding, with the government providing

only but a generous amount fairly enough to make

small improvements and maintenance in the church.

SIGNIFICANCE OF THE STUDY

This study will be undertaken to provide information

on how citizens value the Miagao Church, which is a

UNESCO World Heritage Site through their

willingness to pay for its conservation.

The results of this study could be used to estimate

financial support for preserving the said site by the

government.

In addition, the results of this study can also be used

to provide contributions in exploring alternative

sources of financing the conservation of the Santo

Tomas de Villanueva Church.

Finally, this study also aims to inspire and focus

future research efforts on economic aspects of

heritage site preservation.

OBJECTIVES OF THE STUDY

GENERAL OBJECTIVE

The research generally aims to determine how a

UNESCO World Heritage Site is valued, as well as

provide factors affecting their willingness to pay.

SPECIFIC OBJECTIVES

Measure the knowledge and interest or attitude of

people towards the subject of conservation and

management of cultural heritage sites, more

specifically, the Church of Santo Tomas de Villanueva

in Miagao, Iloilo.

SPECIFIC OBJECTIVES

Assess socio-economic and demographic factors

affecting the willingness to pay for the conservation

and management of the Santo Tomas de Villanueva

church.

SPECIFIC OBJECTIVES

Recommend policies regarding the sources for

funding, as well as the efforts that can be taken to

preserve and manage the heritage site.

CONCEPTUAL FRAMEWORK


Theoretical Framework

ECONOMIC VALUATION

Economic valuation refers to the assignment of

money values to non-marketed assets, goods

and services, where the money values have a

particular and precise meaning. (Pearce, et. al. 2002)

Non-marketed goods and services refer to those

which are not directly bought and sold in the

market place.

When an environmental resource simply exists and

provides us with products and services at no extra

cost, then it is our WTP alone that describes the

value of the resource.

The aim of economic valuation techniques is to

uncover the total economic value (TEV) of the

good in question.

In this study, the good that will be under economic

valuation will be a heritage site. According to

Pagiola(1996) heritage site problems share many

characteristics with problems encountered in

environmental economics.

TOTAL ECONOMIC VALUE

The economic value of something can be regarded as

the extent to which people would be willing to

sacrifice something else in order to obtain or

safeguard a quantity of it. Total economic value

comprises the sum of use and non-use values.


Use values maybe direct (e.g. consuming the good),

or indirect (e.g. functional benefits of an ecosystem)


In addition to these values, individuals may be

willing to pay to conserve for future use. These are

the option value, in which the individual is willing

to pay for the conservation or preservation of the

good for his/her own future use, and bequest value,

wherein an individual’s WTP for conservation of the

good for the future use of others.


NON-USE VALUES

Non-use value refers to the value placed upon a

non-rival and non-excludable public good

characteristic that are usually possessed by natural

and heritage sites. These values are not consumable

by individuals or tradable through markets.

NON-USE VALUES

Non-use values include:

Existence value

People value the existence of the good

(heritage site in this study) even though they may

not consume or use its services directly

NON-USE VALUES


Option value

People wish to preserve the good that they or

others might consume the good or asset in the

future

NON-USE VALUES


Bequest value

People may wish to bequeath or preserve the

good for the future generation

NON-USE VALUES


Quasi-option value

Derived from the possibility that even though

a site may seem unimportant now, information

received later might lead us to reevaluate it.

CONTINGENT VALUATION METHOD

Contingent Valuation Method is a survey method in

which an individual is asked how much they are

willing to pay for the use or conservation of natural

goods, and in this study, a heritage good.


The actual valuation can be obtained in a number of

ways: respondents can be asked to name a figure,

having them to choose from a number of options, or

asking them whether they would pay a specific

amount (follow-up questions with higher or lower

amount are often used).


CVM can be used to value any environmental

benefit. It concentrates on the non-market good or

service as a whole.


Navrud and Ready (2002) stated that cultural

heritage goods are well suited to CV studies because

most respondents accept the idea of the public

provision of these goods.


Empirical Framework

WTP

WTP, or willingness to pay, is the value an

individual is willing to give up for a good or

benefit. Because CVM is based on welfare

economics, WTP amounts are related to the

individual’s preference.

WTP

WTP of an individual is also affected by certain

socio-economic factors (e.g. age, sex). In this

study, the WTP values that will be gathered will be

focused on the non-use value or benefit of the good.

WTP

WTP will be the amount or value an individual is

willing to give up for the preservation and

maintenance of a cultural heritage site.

WTP

WTP = f ( P, I, S)

Where:

f- determining factors

P- bid price

I-income

S- socio-economic factors (e.g. age, gender, educational

background)

WTP QUESTION

The dichotomous choice format question will be as follows:

(adapted from Subade, 2005)

Would you be willing to pay _____ (figure randomly selected)

pesos as your yearly contribution to the trust fund for the

next five years, in order to preserve and for the maintenance

of Sto. Tomas de Villanova, or commonly known as Miagao

Church which is a UNESCO world heritage site? Please keep

in mind your present income and financial commitments.”

METHODOLOGY

LOCALE OF THE STUDY

Iloilo city will be the locale of the study. The

researcher decided that this will be an adequate

locale for the study since it is the capital of Iloilo,

and is within just the right proximity to the heritage

site, but not too close either, to influence biases, as

well as use values.

LOCALE OF THE STUDY

The study will focus in the non-use value of the

heritage site, and using Miagao as the locale of the

study might result in inconsistencies in the results.

LOCALE OF THE STUDY

As previously mentioned, Iloilo city is the capital of

the province of Iloilo. This being stated, it also holds

true that the capital holds the most number of

households. This may also be helpful to acquire more

diverse and a wider range of participants.

DATA SOURCES

Primary Data Sources

The primary source of data for the research

will be surveys that will be personally delivered,

followed-up, and collected from households in the

locale of the study. Personal interviews will also be

conducted.

DATA SOURCES

Secondary Data Sources

Secondary data that will be used in the research will

be derived from previous studies and published works in

valuation, preservation, conservation and management of other

heritage sites, as well as the internet for other sources that are

only available through digital media, and other websites built

specifically for the purpose of preservation and conservation of

heritage sites, and methods to derive their values.

SAMPLING

Since the locale of the study is specific, and there

are areas that are to be excluded, a purposive

sampling method is the appropriate method.

SAMPLING

The study aims for the area with the largest number

of households in a given area, and an acceptable

proximity as not to affected by biases or negligence,

the most ideal locale will be the Iloilo City, the

capital of the province of Iloilo.

PRE-TEST

A pre-test will be conducted to determine the values

that will be used as choices in the questionnaire that

will be in the dichotomous choice format. The pre-

test will be containing open-ended questions

regarding the WTP of the respondents.

DATA GATHERING

Data will be gathered through surveys that will be

personally delivered, followed-up, and collected.

Personal interviews will also be conducted

depending on the preference and availability of the

respondents.

VARIABLES OF THE STUDY

Independent Variables

The independent variables of the study

include age, gender, educational attainment,

household income, and bid price. These variables

are the factors that are expected to affect the

WTP results.

VARIABLES OF THE STUDY

Dependent Variable

The only dependent variable in the study is

the willingness to pay of each household.

STATISTICAL TOOL

Logit regression will be used to measure the degree

of dependence of the dependent variable to the

independent variables. It will be used to correlate

the respondents’ WTP to the respondents’ socio-

economic status. A computer software will be used

to make this measurement; preferably SPSS.

END.

Education

Economic Valuation of a World Heritage Site