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  1. 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
  2. 2. <ul><li>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. </li></ul>
  3. 3. Content <ul><li>I. Introduction </li></ul><ul><li>II. Methodology </li></ul><ul><li>III. Results </li></ul><ul><li>IV. Conclusion </li></ul><ul><li>V. Personal Reflection </li></ul>
  4. 4. Introduction <ul><li>United Nations Educational, Scientific and Cultural Organization (UNESCO) </li></ul><ul><li>World Heritage List ( ) </li></ul><ul><li>- cultural assets </li></ul><ul><li>- natural assets </li></ul><ul><li>- mixture </li></ul>
  5. 5. Introduction <ul><li>1. Jeju Volcanic Island and Lava Tubes (2007) </li></ul>
  6. 6. Introduction <ul><li>1. Haeinsa Temple Janggyeong Panjeon, the Depositories for the Tripitaka Koreana Woodblocks (1995) </li></ul>
  7. 7. Introduction <ul><li>2. Jongmyo Shrine (1995) </li></ul>
  8. 8. Introduction <ul><li>3. Seokguram Grotto and Bulguksa Temple (1995) </li></ul>
  9. 9. Introduction <ul><li>4. Hwaseong Fortress (1997) </li></ul>
  10. 10. Introduction <ul><li>5. Gochang, Hwasun and Ganghwa Dolmen Sites (2000) </li></ul>
  11. 11. Introduction <ul><li>6. Gyeongju Historic Areas (2000) </li></ul>
  12. 12. Changdeok Palace <ul><li>Centre of Seoul </li></ul><ul><li>Total area: 580,000m² </li></ul><ul><li>1405 </li></ul><ul><li>Eco-friendly </li></ul><ul><li>Representative tourism attraction to foreign tourists </li></ul><ul><li>Entrance price: </li></ul><ul><li>US$2.30/adult </li></ul><ul><li>US$1.20/youth or soldier </li></ul>
  13. 13. Changdeok Palace
  14. 14. Introduction
  15. 15. Introduction <ul><li>“ Most of the past studies have attempted valuation of cultural heritage goods by asking residents their willingness-to-pay (WTP) for taxes or donations.” </li></ul><ul><li>(Kim, Wong, & Cho, 2007) </li></ul>
  16. 16. Methodology <ul><li>Contingent valuation method (CVM): </li></ul><ul><li>a survey-based economic technique for the valuation of non-market resources </li></ul><ul><li>a sample of the relevant population is asked to state their willingness-to-pay (WTP) </li></ul>
  17. 17. Research Objective <ul><li>- to investigate use value of the World Cultural Heritage through the contingent valuation method (CVM) </li></ul>
  18. 18. <ul><li>Detailed information about touristic and cultural value of Changdeok Palace </li></ul><ul><li>Close-ended/dichotomous choice </li></ul><ul><li>Price offers were divided into 10 categories </li></ul>Questionnaire In return for using this traditional site would you be willing to pay – more than present admission prices : (1) Yes, (2) No
  19. 19. Methodology Pre-test Participants 50 Korean adult visitors Duration a week (Sept. 17, 2004- Sept. 24, 2004) Main Survey Participants N/A Duration two weeks (Oct. 17, 2005– Oct. 31, 2005)
  20. 20. Methodology log-linear log-logit estimate the use value identify and compare WTP determinants
  21. 21. Results Percentage Gender Female Male 57.7 42.3 Age 20s 59.2 Residents in Seoul 59.5 Monthly household income $2000-3000 27.7 Profession student professional clerks others 32.0 20.0 16.0 32.0 Educational Level university graduate 52.5
  22. 22. Results
  23. 23. Results
  24. 24. Results
  25. 25. <ul><li>LIMDEP 8.0 program </li></ul>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
  26. 26. <ul><li>Respondents are willing to pay at least twice as much as the current price. </li></ul><ul><li>High level of WTP values alleviate the worry of strategic behavior. </li></ul>Conclusion
  27. 27. Conclusion 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
  28. 28. Personal Reflection <ul><li>Lack of demographic data of participants </li></ul><ul><li>Lack of statistical data </li></ul><ul><li>Mentioned consistency with other researches too often </li></ul>
  29. 29. <ul><li>Thanks for your attention! </li></ul>