Economic Analysis of Investments in Cultural Heritage: Insights from Environmental Economics

1. Cultural heritage problems share many characteristics with problems encountered in environmental economics. Many of the services provided may not enter markets, or do so only indirectly and imperfectly. And many benefits are wholly intangible. Moreover, the nature of the benefits provided by cultural heritage sites is conceptually very similar to those provided by, for example, national parks. Whether aesthetic benefits are derived from buildings or trees and whether recreation benefits are derived from museum visits or fishing makes little difference to the valuation problem. This paper draws on recent advances in the field of environmental economics to discuss how a cost-benefit analysis of a project involving a cultural heritage site might be conducted.