Cost–Benefit Analysis in the Evaluation of Cultural Heritage Project Funding

Sanja Tišma,Sanja Maleković,Mira Mileusnić Škrtić,Daniela Angelina Jelinčić

doi:10.3390/jrfm14100466

Sanja Tišma, Sanja Maleković + Show 2 more

Open Access

https://doi.org/10.3390/jrfm14100466

Copy DOI

Abstract

Cultural heritage has, for a long time, been considered a source of wealth and well-being for economies. Currently, considerable investments have been allocated for its renewal and maintenance that often surpass the budgets of owners, local communities, and other interested users. Cultural heritage valorisation is expensive and is a great economic challenge. Infrastructural investment, i.e., conservation and restoration, are just one part of the total costs of cultural heritage preservation, while other investments relate to regular operation and maintenance. One of the most difficult decisions for those who design the cultural heritage restoration projects is how to finance them, i.e., what the most efficient financial instruments are for renewal of cultural heritage. These assumptions have instigated interest in the evaluation of services resulting from common good functions of cultural heritage, such as economic, educational, historical, technological, ecological, and climate, as well as tourism and recreational. Therefore, this article starts from the analysis of potential funding sources for cultural heritage through the European Union (EU) funds; a method of economic evaluation of the return on investments and cost–benefit analysis is suggested as a method that should be used in decision making on these interventions.

Highlights

The consideration of culture in economic theory is still mostly based on the setting of neo-classical economic theory, especially welfare economics, with precisely defined rules directed at the research of individual and overall social well-being (Arnsperger and Varoufakis 2006)
The allocation of resources can be seen from a macroeconomic point of view or from the point of view of scarce resources for which certain areas and branches of the economy, regions, states, and even departments or factories within individual enterprises are competing in their programmes of production of goods and services; it can be seen from the microeconomic perspective of consumers, from the distribution of their income between consumption and savings, and, in terms of consumption, from the distribution of money spent for certain goods and services (Loulanski 2006)
Cost–benefit analysis generally deals with determining and comparing the present value of all expected costs and benefits of a project, in order to assess the justifiability of investing in its realisation

Summary

Introduction

The consideration of culture in economic theory is still mostly based on the setting of neo-classical economic theory, especially welfare economics, with precisely defined rules directed at the research of individual and overall social well-being (Arnsperger and Varoufakis 2006). Competition, individual maximisation of usefulness and profit, and minimisation of work and cost, as well as those about time preferences with some additional designations—. Additional assumptions are imposed on models of general balance: maximisation of profits over time and internalisation of the social cost of using cultural heritage (Cheng 2006). The allocation of resources can be seen from a macroeconomic point of view or from the point of view of scarce resources for which certain areas and branches of the economy, regions, states, and even departments or factories within individual enterprises are competing in their programmes of production of goods and services; it can be seen from the microeconomic perspective of consumers, from the distribution of their income between consumption and savings, and, in terms of consumption, from the distribution of money spent for certain goods and services (Loulanski 2006)

Objectives

Methods

Results

Discussion

Conclusion