Presentation for Econ 199.1

1. Economic Valuation of a World Heritage Site: Citizen’s Non-Use Values for the Church of Sto. Tomas de Villanova (Miagao Church) Nasser Domingo & Rowe Roquez Econ 199.1

2. Background

3. The Philippines consists of approximately 98 million citizens; 90% of which are Christians, with about 80% belonging to the Roman Catholic Church (CIA, 2010).

4. Catholicism is one of the most distinguishing characteristics of the Filipino people as an influence of the colonization of the Spaniards. One of the most notable emblems of the Catholics is their churches.

5. Some of these churches have unique architectural style – an interpretation of European Baroque by Chinese and Philippine craftsmen, that four churches were classified as UNESCO World Heritage Sites in 1993 (UNESCO, 1993).

6. The four churches include the Church of San Agustin in Intramuros, Manila; the Church of La NuestraSeñora de la Asuncion, in Santa Maria Ilocos Sur; the Church of San Agustin, in Paoay, Ilocos Norte, and finally; the Church of Santo Tomas de Villanova, in Miag-ao, Iloilo

7. The Church of Santo Tomas de Villanueva withstood the occasional attacks from Muslims coming from the south. The church and its watchtowers had been built with thick walls and secret passages to defend the town and its people. The defensive purpose of the Church led to the popular name The Miag-ao Fortress Church(Chemma, 2009).

8. The research will aim to conduct an economic valuation of the non-market benefits of maintaining a UNESCO World Heritage Site and to determine how people value the said site.

9. Statement of the Problem

10. There have been very few studies regarding the valuation of cultural heritage sites, as well as information regarding as to the effects of such studies to the present value and treatment of an existing resource or structure.

11. Like the valuation of any cultural heritage site, any individual’s willingness to pay for its conservation and rehabilitation is affected by various factors.

12. These factors may affect their WTP in different ways – positively, negatively or with an unknown direction of effect. This conundrum may be enlightened by a detailed profile and survey of the population affected, evaluated with their willingness to pay.

13. Being a world heritage site, the Miagao church should be provided with adequate funding for its preservation. However, there are very few sources for these funding, with the government providing only but a generous amount fairly enough to make small improvements and maintenance in the church.

14. Significance of the Study

15. This study will be undertaken to provide information on how citizens value the Miagao Church, which is a UNESCO World Heritage Site through their willingness to pay for its conservation.

16. The results of this study could be used to estimate financial support for preserving the said site by the government.

17. In addition, the results of this study can also be used to provide contributions in exploring alternative sources of financing the conservation of the Santo Tomas de Villanueva Church.

18. Finally, this study also aims to inspire and focus future research efforts on economic aspects of heritage site preservation.

19. Objectives of the Study

20. General Objective The research generally aims to determine how a UNESCO World Heritage Site is valued, as well as provide factors affecting their willingness to pay.

21. Specific Objectives Measure the knowledge and interest or attitude of people towards the subject of conservation and management of cultural heritage sites, more specifically, the Church of Santo Tomas de Villanueva in Miagao, Iloilo.

22. Specific Objectives Assess socio-economic and demographic factors affecting the willingness to pay for the conservation and management of the Santo Tomas de Villanueva church.

23. Specific Objectives Recommend policies regarding the sources for funding, as well as the efforts that can be taken to preserve and manage the heritage site.

24. Conceptual Framework

25. Conceptual Framework Theoretical Framework

26. Economic Valuation Economic valuation refers to the assignment of money values to non-marketed assets, goods and services, where the money values have a particular and precise meaning. (Pearce, et. al. 2002) Non-marketed goods and services refer to those which are not directly bought and sold in the market place.

27. When an environmental resource simply exists and provides us with products and services at no extra cost, then it is our WTP alone that describes the value of the resource.

28. The aim of economic valuation techniques is to uncover the total economic value (TEV) of the good in question.

29. In this study, the good that will be under economic valuation will be a heritage site. According to Pagiola(1996) heritage site problems share many characteristics with problems encountered in environmental economics.

30. Total Economic Value The economic value of something can be regarded as the extent to which people would be willing to sacrifice something else in order to obtain or safeguard a quantity of it. Total economic value comprises the sum of use and non-use values.

31. Total Economic Value Use values maybe direct (e.g. consuming the good), or indirect (e.g. functional benefits of an ecosystem)

32. Total Economic Value In addition to these values, individuals may be willing to pay to conserve for future use. These are the option value, in which the individual is willing to pay for the conservation or preservation of the good for his/her own future use, and bequest value, wherein an individual’s WTP for conservation of the good for the future use of others.

33. Total Economic Value

34. Non-use Values Non-use value refers to the value placed upon a non-rival and non-excludable public good characteristic that are usually possessed by natural and heritage sites. These values are not consumable by individuals or tradable through markets.

35. Non-use Values Non-use values include: Existence value People value the existence of the good (heritage site in this study) even though they may not consume or use its services directly

36. Non-use Values Non-use values include: Option value People wish to preserve the good that they or others might consume the good or asset in the future

37. Non-use Values Non-use values include: Bequest value People may wish to bequeath or preserve the good for the future generation

38. Non-use Values Non-use values include: Quasi-option value Derived from the possibility that even though a site may seem unimportant now, information received later might lead us to reevaluate it.

39. Contingent Valuation Method Contingent Valuation Method is a survey method in which an individual is asked how much they are willing to pay for the use or conservation of natural goods, and in this study, a heritage good.

40. Contingent Valuation Method The actual valuation can be obtained in a number of ways: respondents can be asked to name a figure, having them to choose from a number of options, or asking them whether they would pay a specific amount (follow-up questions with higher or lower amount are often used).

41. Contingent Valuation Method CVM can be used to value any environmental benefit. It concentrates on the non-market good or service as a whole.

42. Contingent Valuation Method Navrud and Ready (2002) stated that cultural heritage goods are well suited to CV studies because most respondents accept the idea of the public provision of these goods.

43. Conceptual Framework Empirical Framework

44. WTP WTP, or willingness to pay, is the value an individual is willing to give up for a good or benefit. Because CVM is based on welfare economics, WTP amounts are related to the individual’s preference.

45. WTP WTP of an individual is also affected by certain socio-economic factors (e.g. age, sex). In this study, the WTP values that will be gathered will be focused on the non-use value or benefit of the good.

46. WTP WTP will be the amount or value an individual is willing to give up for the preservation and maintenance of a cultural heritage site.

47. WTP WTP = f ( P, I, S) Where: f- determining factors P- bid price I-income S- socio-economic factors (e.g. age, gender, educational background)

48. WTP Question The dichotomous choice format question will be as follows: (adapted from Subade, 2005) Would you be willing to pay _____ (figure randomly selected) pesos as your yearly contribution to the trust fund for the next five years, in order to preserve and for the maintenance of Sto. Tomas de Villanova, or commonly known as Miagao Church which is a UNESCO world heritage site? Please keep in mind your present income and financial commitments.”

49. METHODOLOGY

50. Locale of the Study Iloilo city will be the locale of the study. The researcher decided that this will be an adequate locale for the study since it is the capital of Iloilo, and is within just the right proximity to the heritage site, but not too close either, to influence biases, as well as use values.

51. Locale of the Study The study will focus in the non-use value of the heritage site, and using Miagao as the locale of the study might result in inconsistencies in the results.

52. Locale of the Study As previously mentioned, Iloilo city is the capital of the province of Iloilo. This being stated, it also holds true that the capital holds the most number of households. This may also be helpful to acquire more diverse and a wider range of participants.

53. Data Sources Primary Data Sources The primary source of data for the research will be surveys that will be personally delivered, followed-up, and collected from households in the locale of the study. Personal interviews will also be conducted.

54. Data Sources Secondary Data Sources Secondary data that will be used in the research will be derived from previous studies and published works in valuation, preservation, conservation and management of other heritage sites, as well as the internet for other sources that are only available through digital media, and other websites built specifically for the purpose of preservation and conservation of heritage sites, and methods to derive their values.

55. Sampling Since the locale of the study is specific, and there are areas that are to be excluded, a purposive sampling method is the appropriate method.

56. Sampling The study aims for the area with the largest number of households in a given area, and an acceptable proximity as not to affected by biases or negligence, the most ideal locale will be the Iloilo City, the capital of the province of Iloilo.

57. Pre-Test A pre-test will be conducted to determine the values that will be used as choices in the questionnaire that will be in the dichotomous choice format. The pre-test will be containing open-ended questions regarding the WTP of the respondents.

58. Data Gathering Data will be gathered through surveys that will be personally delivered, followed-up, and collected. Personal interviews will also be conducted depending on the preference and availability of the respondents.

59. Variables of the Study Independent Variables The independent variables of the study include age, gender, educational attainment, household income, and bid price. These variables are the factors that are expected to affect the WTP results.

60. Variables of the Study Dependent Variable The only dependent variable in the study is the willingness to pay of each household.

61. Statistical Tool Logitregression will be used to measure the degree of dependence of the dependent variable to the independent variables. It will be used to correlate the respondents’ WTP to the respondents’ socio-economic status. A computer software will be used to make this measurement; preferably SPSS.

62. End.