The Economic value of Fasileades World Heritage Royal Enclosure: A Travel Cost Approach

Abstract

The measurement of economic values provided by historic/cultural heritage has increasingly been recognized as a fundamental part of cultural heritage policy, and it is increasingly being considered in the policies of social and economic development. Valuation of cultural or historic heritage sites shares many characteristics with the problems encountered in valuing the environment. Its value cannot be easily identified as many of the places may not enter markets, or do so indirectly and imperfectly, and many benefits are wholly intangible. This paper focused on an empirical application of the travel cost method, to estimate the economic value (use value) of Fasileades World Heritage Royal Enclosure which constitutes an important historic heritage item of Ethiopia, classified by UNESCO in 1997, as a world heritage site. The result of the study indicates the truncated Poisson model as the appropriate model for the regression analysis than the negative binomial regression model in view of the fact that over dispersion problem was not found on the data. Seven out of ten variables (total travel cost, income, educational level, family size, age, group status and years of acquaintance) were significant on both models. Marital status, gender and cost of visiting the best alternative site become insignificant variables on determining visitor’s number of visit to the Fasileades Royal Enclosure site. The domestic aggregate benefit of the site (use value of the study site) was estimated to be Birr 50,218,102.6 per annum, implying that the site authorities collected only 9.4% of this sum. In addition, the individual average per visit consumer surplus and aggregate consumer surplus was estimated to be birr 404.85 and birr 38,119,056.6 respectively. This indicates that the economic benefit of the site is much larger than what is currently collected by the authorities and thus the site authority can change the current prices of visiting the site. Moreover, alleviating problems that reduce the quality of the site service is very important to attract more visits.