Valuing the Cultural Monuments of Armenia: Bayesian Updating of Prior Beliefs in Contingent Valuation

The most appropriate way to measure the social benefits of conserving built cultural heritage sites is to ask the beneficiaries of conservation interventions how much they would be willing to pay for them. We use contingent valuation—a survey-based approach that elicits willingness to pay (WTP) directly from individuals—to estimate the benefits of a nationwide conservation of built cultural heritage sites in Armenia. The survey was administered to Armenian nationals living in Armenia, and obtained extensive information about the respondents' perceptions of the current state of conservation of monuments in Armenia, described the current situation, presented a hypothetical conservation program, elicited WTP for it, and queried individuals about what they thought would happen to monument sites in the absence of the government conservation program. We posit that respondents combined the information about the fate of monuments provided by the questionnaire with their prior beliefs, and that WTP for the good, or program, is likely to be affected by these updated beliefs. We propose a Bayesian updating model of prior beliefs, and empirically implement it with the data from our survey. We found that uncertainty about what would happen to monuments in the absence of the program results in lower WTP amounts.