Contingent Valuation Method (CVM) for Urban Restoration in the Centre of Athens

Abstract

In the case of restoration of the urban environment in the centre of Athens in Greece, the author uses the Willingness to Pay (WTP) method to compute approximate external economies. The preservation/restoration of natural environment is frequently entailing excessive cost (paid by people through taxation), while it is a source of additional income for both, the state and the people, due to tourism. Since the evaluation of this good cannot be in market terms, we apply here in a modified version of the Contingent Valuation Method (CVM), which is used in Experimental Economics, in order to investigate the significance that people put on this good and how much they might be willing to pay for supporting activities concerning the preservation/restoration of the urban environment of the centre of Athens. It is proved that there is no significant linear correlation between WTP and WTA (Willingness to Accept), in spite of what is suggested in certain theoretical aspects; thus, not only the WTA-WTP disparity, reported also by some authors (in cases other than aesthetic pollution), is confirmed but, furthermore, the lack of correlation is proved.