nep-cul New Economics Papers
on Cultural Economics
Issue of 2006‒06‒03
six papers chosen by
Roberto Zanola
Universita degli Studi del Piemonte Orientale

  1. Valuing cultural heritage benefits to urban and regional development By Patrizia Riganti; Peter Nijkamp
  2. Public Preferences for Land uses’ changes - valuing urban regeneration projects at the Venice Arsenale By Patrizia Riganti; Anna Alberini; Alberto Longo
  3. Benefit transfers of cultural heritage values - how far can we go? By Patrizia Riganti; Peter Nijkamp
  4. The Effect of Reputation on Selling Prices in Auctions By Oliver Gürtler; Christian Grund
  5. What Has Been Capitalized into Property Values: Human Capital, Social Capital, or Cultural Capital? By Shihe Fu
  6. Mass Media: Constrained Information and Heterogenous Public By Kwiek, Maksymilian

  1. By: Patrizia Riganti; Peter Nijkamp
    Abstract: This paper discusses the role that cultural heritage has in shaping social capital in contemporary cities, and the available valuation methodologies capable of measuring its impacts on cities’ economic growth. First, the economic nature of cultural goods and the role played by their valuation in regional planning is discussed. Then a critical review of the current available valuation methodologies is presented. Finally, the potential of meta-analysis is debated. Cultural heritage represents the record of mankind achievements and relationships with the world. Therefore, it has always a local dimension, though sometimes it embeds universally shared values. The concept of heritage is not given, but created by a community, by people who attach values to some objects, rites, languages, contexts, lifestyles, historic sites and monumental buildings. Labelling something as heritage represents a value judgment, which distinguishes that particular object from others, adding new meaning to it. Cultural heritage summarises people’s identities, shapes communities’ ones, and to this extent contributes to the creation of social capital. Heritage is a social, economic, and cultural resource. Heritage valuation becomes a tool to better understand the significance of heritage to different sections of society. The valuation process aims to assess existing values as attached by the relevant population. However, the ultimate aim in the context of policy analysis is to value in order to achieve the valorisation of our heritage, in order words, to add new values to the existing ones. Therefore, valuation represents a crucial step in the management of cultural heritage and in regional development. Cultural heritage ownership rests with society which may also decide on the access conditions; in principle, no citizen can be excluded from its use. Clearly, the specific nature of cultural heritage as a collective good also implies that the investment and maintenance costs have to be covered by all citizens. Free ridership is not a meaningful option under such circumstances, so that usually taxation schemes – sometimes accompanied by private transaction schemes (such as entry tickets) or even subsidisation schemes – are put in place to ensure financial viability of maintaining the stock of cultural heritage. Consequently, valuation issues of cultural heritage deserve a prominent place in the socio-economic analysis of these assets. Cultural heritage has another feature which gives it a specific characteristic: it is usually unique in nature and hence not substitutable. Consequently, the social value of cultural heritage cannot be assessed by means of normal market transactions, as the usual conditions for market transactions are lacking. In conclusion, the evaluation of cultural heritage is fraught with many complex problems of both an economic and socio-cultural nature. There is not an unambiguous approach that has a universal validity. Rather, there are classes of assessment and evaluation methods that may be helpful in specific cases. . In the history of evaluation a wide variety of different methods has been developed, such as social cost-benefit analysis, planning balance sheet analysis, community impact assessment, multicriteria analysis, participatory group decision analysis, shadow project evaluation, and so forth. There is not a single best method, as the valuation of non-traded goods cannot be solved in a straightforward manner. The present paper aims to offer a concise introduction to the problems at hand and to discuss various classes of evaluation techniques that have been developed and employed in the past years. Despite the appreciation of the role played by cultural heritage in the development of the city, research efforts have not been sufficiently integrated to tackle the complex issues related to its conservation and the need to develop comprehensive approaches and methodologies for its management. Valuation methods play a strategic role in this context. They represent an essential tool to assess the value of urban heritage per se, the potential economic benefits of its transformation, the damage caused to it by environmental hazards, and the benefits of alternative management options for its exploitation. However, evaluation of cultural heritage cannot be based on generic assessment techniques, but has to be performed by tailor-made methods that address the specifications of cultural assets. This paper discusses a way forward.
    Date: 2004–08
  2. By: Patrizia Riganti; Anna Alberini; Alberto Longo
    Abstract: This paper discusses the results of a conjoint analysis study developed to assess alternative land uses for an important part of the city of Venice: its Arsenal. Aim of the study is to illustrate the potential of stated preferences techniques for placing a value on redevelopment and reuse alternatives for an underutilized site with high historical, cultural and architectural significance. Very few studies have used conjoint choice to assess public preferences for alternative land uses in an ex-ante framework, i.e. masterplans. For our study, we wanted to concentrate on a “city of art,” where the relationship between cultural heritage resources management and city development is more critical. Venice was an obvious choice for the national and international relevance of its heritage. The Arsenale is one of the few places in Venice that has the potential for a real transformation of its uses, with important impacts on both residents and visitors. Moreover, the Arsenale plays a strong symbolic role: it was the place where the strength and power of the Serenissima was built. The City Council of Venice has recently deliberated that the Arsenale is an inalienable heritage of the city of Venice. In recent years, the importance of the Arsenale has resulted in a heated debate on its possible new uses. Many architectural proposals have been submitted through international competitions. These proposals—whether submitted in the past or currently under consideration—have shown that there may be a conflict between different possible land uses and the transformation allowed by the existing architectural structures. We surveyed individuals in Venice asking respondents to engage in conjoint choice tasks, gathering 168 usable observations. Members of the general public were intercepted at the Multimedia Library at Palazzo Querini Stampalia/FEEM and asked to indicate which choice they preferrd among hypothetical—but realistic—redevelopment projects of the Arsenale historic site. Each project was described by a vector of attributes, such as land use, use of basins and waterways, architectural features, access, employment implied by the reuse, and cost. The responses to these choice tasks was used to infer the rate at which respondents trade off land uses, aesthetic features, and costs, and hence to derive the value of marginal changes in the attributes, and the value of a proposed policy package. The Venice Arsenale is owned by the Italian government and is currently used by the Italian Navy. The Arsenale site accounts for about 15 percent of the area of the city of Venice (about 45 hectares), and is located in the Castello district. Tradition has it that doge Ordefalo Falier founded the Arsenale—a shipbuilding yard—in 1104. In 1340 the “Darsena Nuova” was created, which marked the birth of the Arsenal Nuovo and of the Corderie building. Further expansion started in 1473, covering an area of 26 hectares. This phase lasted more than 100 years, resulting in the construction of the New Corderie building, among others, in 1591. In its heyday, the Arsenale employed roughly 20,000 workers in an assembly-line fashion and produced one ship a day. The Arsenale, after the navy largely withdrew from the complex over 40 years ago, suffered from abandonment and under use. The Arsenale is, therefore, one of the few places in Venice that has the potential for a real transformation of its uses. In this paper we investigate how the development of the Arsenale site, involving alternative land uses, may influence the welfare of the residents of the historical city center of Venice. Starting from the evidence of our survey in Venice, the paper broaden its scope to discuss ways of improving the management of cultural heritage cities, focusing on new forms of involvement and public participation based on public preferences’ elicitation. We debate the issues related to city governance and the need for an appropriate level of democratic participation. An integrated approach, capable of bridging the practice of economic valuation, urban design, conservation of the built environment, and decision-making support systems is here analysed.
    Date: 2005–08
  3. By: Patrizia Riganti; Peter Nijkamp
    Abstract: Assessing the economic values attached to alternative land uses, when cultural heritage goods are at stake, makes the valuation process more articulated. Economic elicitation of cultural heritage values is quite a recent practice. Not many case studies have applied non-market valuation techniques, such as contingent valuation methods or travel cost methods, to derive monetary estimates of cultural goods attribute and even fewer applications have been policy oriented. Being a relatively recent research field, the first applications have mainly dealt with the challenges faced by the valuation techniques and the validity and reliability of results. These studies, particularly contingent valuation ones, have very high implementation costs. Hence, to obtain primary estimates of cultural values, agencies need to spend a great deal of money and time. Since these resources are scarce, there is an impinging need to consider the possibility of transferring benefit estimates from a specific “study site” for which data has been collected, to a “policy site” for which there is little or no information. An important question often addressed in the literature is what we can learn from individual case studies for a next case study. How general are the results of case study research? Can we transfer findings from a set of rather similar case studies to a new case study? This question is known as the benefit transfer (or value transfer) issue and seeks to investigate under which (general and specific) conditions common findings from various case studies are more or less valid for a new given case at a distinct site. Knowledge acquisition in the social sciences, and hence also in economics, is usually based on a reductionist approach, which eliminates many person-specific, object-specific or site-specific characteristics of a phenomenon, but the major advantage is that it allows for generalization through a common standardized approach that is applicable to a larger population. This methodology lies also at the heart of meta-analysis, which seeks to synthesize research findings from different case studies (van den Bergh et al. 1997, van den Bergh and Button 1997, 1999). Through the use of common relevant descriptors (behavioural, methodological, contextual) it is possible to draw inferences from a large sample of cases. For value transfer (also commonly named ‘benefit transfer’) the possibility of using meta-analysis is of major importance (Bal and Nijkamp 1998a). The basic idea of value transfer is that knowledge accumulated over time may be subjected to a transfer to a new, similar type of study. For the use of knowledge on a new similar study, it would be ideal if almost identical site characteristics could be transferred without any manipulation and if, at the same time, typical site-unique characteristics could be taken into account: that is, if it were possible to adapt derived variables for these site-unique characteristics.Value transfer studies in cultural heritage economics are rather rare, and the idea itself is quite controversial. In this paper we offer a concise – and certainly not exhausting – review of some recent value transfer studies in this area, with a particular view to spatial variability and transferability. We discuss limits and potentialities of benefit transfer approach for cultural values, aiming to raise debate on the topic. We acknowledge the local nature of cultural values and the strict relationship with the population to which the specific heritage belongs, but we focus on the more universally shared values that are embedded in cultural heritage and on possible ways of expressing them in terms of priorities and clusters. More research is needed in this direction before dismissing the possibility to apply benefit transfer in the case of cultural values estimates.
    Date: 2005–08
  4. By: Oliver Gürtler (Department of Economics, BWL II, University of Bonn, Adenauer-allee 24-42, D-53113 Bonn, Germany. Tel.:+49-228-739214, Fax:+49-228-739210; Christian Grund (Department of Economics and Business RWTH Aachen University Templergraben 59 D-52056 Aachen Germany Tel.:+49-241-8096381
    Abstract: In economic approaches it is often argued that reputation considerations influence the behavior of individuals or firms and that reputation influences the outcome of markets. Empirical evidence is rare though. In this contribution we argue that a positive reputation of sellers should have an effect on selling prices. Analyzing auctions of popular DVDs at eBay we, indeed, find support for this hypothesis. Secondary, we unmask the myth that it is promising for eBay sellers to let their auction end at the evening, when many potential buyers may be online.
    Keywords: Reputation, eBay feedback system, auction
    JEL: D44 D82 K12 L81
    Date: 2006–05
  5. By: Shihe Fu
    Abstract: Urban amenities can be capitalized into land values or property values. However, little attention has been paid to the capitalization of social amenities. This paper classifies three types of social-interaction-based social amenities: human capital, social capital, and cultural capital at residential neighborhood levels. We use the restricted version of the 1990 Massachusetts Census data and estimate hedonic housing models with social amenities. The findings are as follows: (1) Human capital has significant positive effects on property values. This tests the Lucas conjecture. (2) Different types of social capital have different effects on property values: an increase in the percentage of new residents has significant positive effects on property values, probably due to the strength of weak ties. However, an increase in the percentage of single-parent households has negative effects on property values. An increase in the home ownership rate has positive effects at large geographic levels. (3) Cultural capital effects vary from high to low geographic levels, the effects of English proficiency and racial homogeneity are positive at and beyond the tract level, but insignificant at the block level. This may imply that cultural capital is more important in social interactions at large geographic scale.
    Keywords: Urban amenities, capitalization, property values, human capital, social capital, cultural capital, hedonic model, social interaction
    JEL: A14 C21 D62 H41 R31
    Date: 2005–10
  6. By: Kwiek, Maksymilian
    Abstract: This paper investigates how mass medium (sender) provides information to readers or viewers (receivers) who have diverse interests. The problem of the sender comes from the fact that there is a constraint on how much information can be delivered. It is shown that the sender can optimally provide information that is somewhat useful to all agents, but not perfect to anybody in particular. Because all receivers observe only one coarse signal delivered by the same mass medium their bahaviour is pefectly correlated, positively or negatively, even if the underlying states of nature are independent. In addition, if the correlation between states of nature of any two players is sufficiently high, their behaviour is positively correlated. However, we may have a situation where all agents are symmetric, the correlation of states of nature is negative (positive), but the behaviour is positively (negatively) correlated. The model can be used to explain the role of mass media in creating comovement among various industries during business cycle, or finacial contagion. Keywords; Mass media, news, cheap talk, quantization, comovement, herding, contagion. JEL Classification: L82, E32

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