1. Two cases for valuation of cultural goods
September 8, 2016
Trine Bille
Associate Professor, Ph.D.
Copenhagen Business School
Department of Management, Politics and Philosophy

4. Publications
Bille Hansen, Trine (1997): The Willingness-to-Pay for the Royal Theatre in Copen­hagen as a Public Good, Journal of Cultural Economics, vol. 21, no.1, pp 1-28
Bille Hansen, Trine (2002): A Contingent Valuation Study of the Royal Theatre in Copenhagen, In: Ståle Navrud and Richard Ready (ed.): Valuing Cultural Heritage. Applying Environmental Valuation Techniques to Historical Buildings, Monuments and Arti­facts, Edward Elgar Publishing, pp

5. Application: The Royal Danish Theatre
Purpose:
To investigate if CVM can be used in order to estimate the total value of the Royal Theatre to the Danish population
To study whether the value of the Royal Theatre’s non-market benefits can justify the public grants given to the theatre
Activity at its present level

6. The Royal Theatre
Received about 266 mio. DKK in support from the state every year (at the time of the study)
Equal to more than 80 percent of the total budget of the theatre
Well defined cultural good. All Danes are familiar with it and know they are already paying for it through taxes
Very elitist cultural institution: 7% of the population has been to the Royal Theatre with the last year, and 68 percent has never been there

7. Design of the study
A random sample of the Danish population over 16 years old
1,843 people had been interviewed by telephone (responserate 77)
WTP: what is the maximum amount the citizens are willing to pay (WTP) for the Royal Theatre to continue its activities at the present level?

8. Design of the study
Question: ”How much are you willing to pay at the most to the Royal Theatre through taxes?”
Non-market value: ”Do you think that the Royal Theatre has value for people other than those who go there, because it of significance for the country’s cultural level, attracts tourists or for other reasons?”
Budget restriction: “would you still pay more, if it is necessary to raise taxes?”
Experiment: split-sample, with and without information about all Danes over the age of 18 pay on average about DKK 60 a year to the Royal Theatre through taxes.

9. Average
Wtp (DKK)
Don’t
know
(%)
Zero bids
Median
Wtp
(DKK)
With
Info. 79 8 16 60
Without
259 37 21
All
154 23 18

10. Taxpayer
(1.000)
Aggreg.
average
median
Public subsidy
With
Info.
350 mio.
DKK
270 mio.
Without
1,165 mio. DKK
Believed
payment
1,797
Mio. DKK
450 mio.
All
4,498
690 mio.
266 mio.

11. Validity of the study
A number of socio-economic factors are able to explain WTP in a way that is consistent with theory
The probability of having a high wtp and to consider the Royal Theatre to have non-use value, is increased:
if they attend many other cultural activities,
have a high income,
a high education,
are women and
live close to the capital
Being unemployed means that the probability of having a high WTP is reduced.

12. Users
Average WTP
Non-users
With info. (DKK)
205 68
Without info. (DKK)
693
232
All (DKK)
368
137
Aggregated WTP
(mio. DKK)
121
561

13. Economic Valuation of Protection of Archaeological Artefacts in Great Aamose, Denmark

14. Publications
Lundhede, Thomas; Berit Hasler og Trine Bille (2005): Værdisætning af naturgenopretning og bevarelse af fortidsminder i Store Åmose i Vestsjælland, Skov- og Naturstyrelsen, sider
Lundhede, Thomas, Trine Bille and Berit Hasler (2013): Exploring Preferences and Non-use Values for Hidden Archaeological Artefacts – a case from Denmark, International Journal of Cultural Policy, vol. 19., no. 4, pp

15. Purpose of the study: Economic valuation of a proposed nature and wetland restoration project in a river basin area, Greate Aamose, in West Zealand.

16. 3 scenarios Differs with respect to:
Differs with respect to:
Protection of archeological artifacts
Improvement of biodiversity
Recreational opportunities (establishment of paths)
Size of the area

17. Valuation method Valuation by the Choice Experiment Method
Internet questionnaire – tested in 3 focus groups
Answer from respondents ( 51%)

18. Preservation of artefacts
Continued devastation: Important artefacts, including internationally unique sacrificial and settlement sites will be destroyed within a number of years.
Reduced devastation : The tempo of the devastation is reduced significantly for some of the most important artefacts, but the devastation is not brought to an end.
Protection now and in the future: The artefacts will be protected within the soil, now and in the future, so that they can be excavated and exhibited in future.

19. Biodiversity: effects for flora and fauna
Low Diversity: A large number of animals, but distributed largely within a limited number of common species. Vulnerable and rare species are threatened by distinction due to dry conditions and cultivation.
Some Diversity: Many animals distributed within a greater number of common species, including small birds. Vulnerable and rare plants are threatened by distinction only in few places.
High Diversity: Many common and rare animal species, especially bird species. Rare species are protected against dry conditions and cultivation.

20. Recreational opportunities (access to the area)
Restricted access via a few tracks and paths
Extended access to a larger part of the area via a wider network of paths and tracks

21. The price-attribute 6 levels from 0 to 200 EUR/year.
It is assumed that the Danes should cover the costs of implementing the alternative in the form a fixed annual sum per individual claimed once a year via the income tax.
6 levels from 0 to 200 EUR/year.
A “Cheap talk” and budget constraint reminder is added

22. Choice set

24. Aggregation for scenario 3 (WTP per individual per year/EUR)

25. Aggregate results and sensitivity analysis

26. Hypothetical questions – hypothetical answers?