1. Assessing the economic value of a world heritage site and willingness-to-pay determinants: A case of Changdeok Palace. Presenter: Jenny Chen 陳瑩珍 Instructor: Dr. Pi-Ying Teresa Hsu March 16, 2009 1

2. Kim, S. S., Wong K. K. F. & Cho, M. (2007). Assessing the economic value of a world heritage site and willingness-to-pay determinants: A case of Changdeok Palace. Tourism Management, 28, 317-322. 2

3. Content I. Introduction II. Methodology III. Results IV. Conclusion V. Personal Reflection 3

4. Introduction United Nations Educational, Scientific and Cultural Organization (UNESCO) World Heritage List (http://whc.unesco.org/en/list)http://whc.unesco.org/en/list - cultural assets - natural assets - mixture 4

5. Introduction Korea, Republic of Haeinsa Temple Janggyeong Panjeon, the Depositories for the Tripitaka Koreana Woodblocks (1995) Jongmyo Shrine (1995) Seokguram Grotto and Bulguksa Temple (1995) Changdeokgung Palace Complex (1997) Hwaseong Fortress (1997) Gochang, Hwasun and Ganghwa Dolmen Sites (2000) Gyeongju Historic Areas (2000) Jeju Volcanic Island and Lava Tubes (2007) http://whc.unesco.org/en/list 5

6. Changdeok Palace 6 Centre of Seoul Total area: 580,000m² Eco-friendly Joseon Dynasty (1392-1910) Representative tourism attraction to foreign tourists Entrance price: US$2.30/adult US$1.20/youth or soldier

7. Changdeok Palace 7

8. Introduction - Postponement of restoration of buildings - Poor maintenance of facilities - Deterioration of service quality - Insufficient publications of brochures Lack of subsidies from government Insufficient revenue 8

9. Introduction “Most of the past studies have attempted valuation of cultural heritage goods by asking residents their willingness-to-pay (WTP) for taxes or donations.” (Kim, Wong & Cho, 2007) 9

10. Research Purpose To investigate use value of the World Cultural Heritage through the contingent valuation method (CVM). 10

11. Methodology Contingent valuation method (CVM): a survey-based economic technique for the valuation of non-market resources a sample of the relevant population is asked to state their willingness to pay (WTP) 11

12. Detailed information about touristic and cultural value of Changdeok Palace Close-ended/dichotomous choice Price offers were divided into 10 categories 12 Questionnaire

13. Pre-test Participants50 Korean adult visitors Durationa week (Sept. 17, 2004- Sept. 24, 2004) Main Survey Participants? Durationtwo weeks (Oct. 17, 2005– Oct. 31, 2005) 13 Methodology

14. 1. To compare the results of two valuation models (log-linear and log-logit) to estimate the use value of the heritage site. 2. To identify and compare the willingness-to-pay (WTP) determinants from the dichotomous model. 14 Methodology

15. Percentage Gender Female Male 57.7 42.3 Age 20s59.2 Residents in Seoul59.5 Monthly household income $2000-300027.7 Profession student professional clerks others 32.0 20.0 16.0 32 Educational Level university graduate52.5 15Results

16. 16 Results

17. Results

18. 18 Results

19. LIMDEP 8.0 program 19 Results Mean WTP Value (log-linear model) 5706 Won ($5.70) Mean WTP Value (log-logit model) 6005 Won ($6.00) Aggregate use value (log-linear model)1.93 million dollars Aggregate use value (log-logit model) 2.01 million dollars

20. Respondents are willing to pay at least twice as much as the current price. High level of WTP values alleviate the worry of strategic behavior. 20 Conclusion

21. 21 Conclusion Raise admission prices Restore old buildings Undertake research Renovate facilities or services Interpret visitors Promote the heritage site Reinforce current or potential users’ beliefs in the importance of cultural assets

22. Personal Reflection Lack of data and background information Too much repetition of information Mentioned consistency with other researches too often 22

23. Thanks for your attention! 23