Contingent Valuation and Cultural Policy Design: The Case of 'Napoli Musei Aperti'

Abstract

The aim of the paper is twofold: to carry out a contingent valuation (CV) study of Napoli Musei Aperti, a cultural public good provided by the city of Naples, and to explore some alternative schemes of cultural policy. Revealing individual preferences is a necessary condition for optimal provision of public goods, and of cultural public goods as well. Moreover, assessing the use value and the passive-use values (existence, option and bequest value), tacitly comprehended by the willingness to pay for cultural public goods, provides a basic information as far as the regulatory policy issues of the cultural sector are concerned. As far as the economic evaluation of cultural public goods is concerned, only a few empirical CV studies can be mentioned. Willis (1994) quantified the user value for the Durham Cathedral; Martin (1994) valued the Musee de la civilisation in Quebec; Bille Hansen (1995) measured the total value of The Royal Theatre in Copenhagen; Scarpa et. al. (1998) estimated access value to the Contemporary Art Museum of the Castello di Rivoli (Turin); Whitehead, Chambers, and Chambers (1998) investigated the preservation value of an historic building located in St.Genevieve, Missouri. Frey (1997) provided a critical appraisal of CV in this area. This paper presents some results of a CV study aimed to measure holistically the total benefits accruing to the local resident from maintaining the provision of Napoli Musei Aperti, a cultural public good provided in Naples. The present application combines and extends in several ways the previous CV studies carried out in the field. The distinctive features of our CV study are retraceable in the ways we set up the scenario, executed the survey, analyzed the data set, and derived policy implications for the cultural sector. Our contingent valuation WTP estimates appear to have a reasonable size. The econometric analysis shows the usefulness of spike models when in the sample there is a large proportion of corner solutions (zero bidders); our findings also indicate that conventional logit analysis, based on the ignorance of the payment principle answers, provides a good approximation to the more complete spike model. As the effect of question formats on values is concerned, we obtained, as have others, a significant difference between discrete and continuous WTP estimates, with discrete format yielding a WTP larger than the open-ended format. The second part of the paper explores policy and regulatory issues that could be designed and implemented through CV estimates. We consider and compare three stylized rules of supply of cultural public good, like Napoli Musei Aperti: market mechanism, public provision, private cooperative and voluntary provision. The system based on voluntary provision seems to be superior from different points of view: gratuity does not compel anyone to contribute; the total revenue is maximum (the whole consumer surplus would be collected); the total cost of provision is covered; nobody is excluded, either explicitly or implicitly, from the consumption of the good; through the voluntary contribution scheme, it is possible to collect money from all components of the total value: use value and passive use values. Finally some equity and fairness issues concerning the provision of a public cultural good are investigated. As far as income distribution is concerned the psychological equity theory is usually opposed to the theory of the independence of public goods individual provision from personal income. To explain why the poor are more willing to pay than the rich are,we stress the importance of the network motive in the voluntary provision of public goods.