Advertisement

Journal of Cultural Economics

, Volume 21, Issue 1, pp 1–28 | Cite as

The Willingness-to-Pay for the Royal Theatre in Copenhagen as a Public Good

  • Trine Bille Hansen
Article

Abstract

In this paper some of the results of a Contingent Valuation (CV)-Study of the Royal Theatre in Copenhagen, Denmark, are presented. The estimated aggregated willingness-to-pay (WTP) for the Royal Theatre through taxes shows that the Danish population wants to pay at least as much as the theatre receives in public subsidies. The visitors comprise only about 7 per cent of the total population, but the non-users' WTP is quite substantial which is the interesting point. It means that the non-users are willing to pay an option price and that the Royal Theatre has non-use value.

contingent valuation willingness-to-pay taxes theatre non-market benefits of the art 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. Arrow, K., Solow, R., Leamer, E., Portney, P., Radner, R., and Schuman, H. (1993) “Report of the NOAA Panel on Contingent Valuation”, Federal Register 58(10): 4601–4614, Washington D.C.Google Scholar
  2. Bergstrom, J. C., Stoll, J. R., and Randall, A. (1990) “The Impact of Information on Environmental Commodity Valuation Decisions”, American Journal of Agricultural Economics 73(3): 615–621.Google Scholar
  3. Bergstrom, J. C., Dillman, B. L., and Stoll, J. R. (1985) “Public Environmental Amenity Benefits of Private Land: The Case of Prime Agricultural Land”, Southern Journal of Agricultural Economics 17(1): 139–199.Google Scholar
  4. Bille Hansen, Trine (1996) Danskernes værdisætning af Det Kgl. Teater. AKF Forlaget, Copenhagen.Google Scholar
  5. Bille Hansen, Trine (1995a) “Measuring the Value of Culture”, The European Journal of Cultural Policy 1(2): 309–322.CrossRefGoogle Scholar
  6. Bille Hansen, Trine (1995b) Some Critical Issues on Bruno S. Frey's Paper: “The Evaluation of Cultural Heritage. Some Critical Issues”. Presented at the conference “Economic Perspectives of Cultural Heritage”, on Sicily, November 16–19, 1995.Google Scholar
  7. Bille Hansen, Trine (1994) The Economic Dimension of Culture with Specific Focus on the Use of Impact Studies. Expert paper for UNESCO, The World Commission on Culture and Development (WCCD).Google Scholar
  8. Bille Hansen, Trine (1991) Det Kgl. Teater – et kulturøkonomisk studie. AKF Forlaget, Copenhagen.Google Scholar
  9. Bishop, R. C. (1982) “Option Value: An Exposition and Extension”, Land Economics 58(1): 1–15.CrossRefGoogle Scholar
  10. Bohm, Peter (1994) “CVM Spells Responses to Hypothetical Questions”, Natural Resources Journal 34(1): 37–50.Google Scholar
  11. Bohm, Peter (1984) “Revealing Demand for an Actual Public Good”, Journal of Public Economics 24(2): 135–151.CrossRefGoogle Scholar
  12. Bohm, Peter (1979) “Estimating Willingness to Pay: Why and How?” The Scandinavian Journal of Economics 81(2): 142–153.CrossRefGoogle Scholar
  13. Bohm, Peter (1975) “OptionDemand andConsumer Surplus:Comment”, American Economic Review 65: 733–736.Google Scholar
  14. Bohm, Peter (1972) “Estimating Demand for Public Goods: An Experiment”, European Economic Review 3(2): 111–130.CrossRefGoogle Scholar
  15. Boyle, K. J. (1989) “Commodity Specification and the Framing of Contingent. Valuation Questions”, Land Economics 65(1): 57–63.CrossRefGoogle Scholar
  16. Braden, J. B. and Kolstad, C. D. (1991) Measuring the Demand for Environmental Quality. North-Holland Publishers, Amsterdam.Google Scholar
  17. Carson, R. T. et al. (1995) A Bibliography of Contingent Valuation Studies and Papers. Inc., La Jolla, California.Google Scholar
  18. Carson, R. T. et al. (1992) A Contingent Valuation Study of Lost Passive Use Values Resulting from the Exxon Valdez Oil Spill. Report to the Attorney General and the State of Alaska, National Resource Damage Assessment, Inc., La Jolla, California.Google Scholar
  19. Carson, R. T. (1991) “Constructed Markets”, in J. B. Braden and C. D. Kolstad, Measuring the Demand for Environmental Quality. North Holland, Oxford.Google Scholar
  20. Cicchetti, C. J. and Freeman, A. M. (1971) “Option Demand and Consumers Surplus: Further Comment”, Quarterly Journal of Economics 85: 528–539.CrossRefGoogle Scholar
  21. Cummings, R. A. et al. (1986) Valuing Environmental Goods: An Assessment of the Contingent Valuation Method. Rowman & Allanheld Publishers, New Jersey.Google Scholar
  22. Diamond, P. A. and Hansman, J. A. (1994) “Contingent Valuation: Is Some Number Better than No Number?” Journal of Economic Perspectives 8(4): 45–64.Google Scholar
  23. Dubgaard, Alex (1996) Economic Valuation of Recreation in Mols Bjerge. SØMrapport, Copenhagen.Google Scholar
  24. Freeman III, A. M. (1993) The Measurement of Environmental and Resource Values. Theory and Methods, Resources for the Future, Washington D.C.Google Scholar
  25. Freeman III, A. M. (1984) “The Size of Option Value”, Land Economics 60: 1–13.CrossRefGoogle Scholar
  26. Frey, Bruno S. (1995) The Evaluation of Cultural Heritage. Some Critical Issues. Paper presented at the conference “Economic Perspectives of Cultural Heritage” in Sicily, November 16–19, 1995.Google Scholar
  27. Frey, Bruno S. and Pommerehne, W.W. (1989) Muses and Markets – Explorations in the Economics of Arts. Brasil Blackwell, Oxford.Google Scholar
  28. Fridberg, Torben (1994) Kultur-og fritidsaktiviteter, 1993. Socialforskningsinstituttet, Copenhagen.Google Scholar
  29. Gapinski, James H. (1984) “The Economics of Performing Shakespeare”, American Economic Review 74(3): 458–466.Google Scholar
  30. Gordon, I. M. and Knetsch, J. L. (1979) “Consumer's Surplus Measures and the Evaluation of Resources”, Land Economics 55(1): 1–10.CrossRefGoogle Scholar
  31. Graham, D. A. (1981) “Cost-Benefit Analysis under Uncertainty”, American Economic Review 71: 715–725.Google Scholar
  32. Hanemann, W. M. (1994) “Valuing the Environment Through Contingent Valuation”, Journal of Economic Perspectives 8(4): 19–43.Google Scholar
  33. Hanemann, W. M. (1991) “Willingness to Pay and Willingness to Accept: How Much Can They Differ?” The American Economic Review 81(3): 635–647.Google Scholar
  34. Hanley, Nick and Munro, Alistair (1992) The Effects on Information in Contingent Markets for Environmental Goods. Queen's Institute for Economic Research, Discussion Paper.Google Scholar
  35. Harrison, G. W. (1993) General Reactions to the NOAA Report.Google Scholar
  36. Hausman, J.A. (1993): Contingent Valuation: A Critical Assessment. North-Holland, Amsterdam.Google Scholar
  37. Kahneman, D. and Knetsch, J. L. (1992) “Valuing Public Goods: The Purchase of Moral Satisfaction”, Journal of Environmental Economics and Management 22(1): 57–70.CrossRefGoogle Scholar
  38. Kahneman, D., Knetsch, J. L., and Thaler, R. H. (1990) “Experimental Test of the Endowment Effect and the Coase Theorem”, Journal of Political Economy 98(6): 1325–1348.CrossRefGoogle Scholar
  39. Kanneman, D. and Tversky, A. (1979) “Prospect Theory: An Analysis of Decisions Under Risk”, Econometrica 47(2): 263–291.CrossRefGoogle Scholar
  40. Knetsch, J. L. and Sinden, J. A. (1984) “Willingness to Pay and Compensation Demanded: Ecperimental Evidence of an Unexpected Disparity in Measures of Value”, The Quarterly Journal of Economics. Aug.: 507–521.Google Scholar
  41. Knetsch, J. L. and Sinden, J. A. (1987) “The Persistence of Evaluation Disparities”, The Quarterly Journal of Economics. Aug.: 691–695.Google Scholar
  42. Martin, Fernand (1994) “Determing the Size of Museum Subsidies”, Journal of Cultural Economics 18: 255–270.CrossRefGoogle Scholar
  43. Marwell, G. and Armes, R. E. (1981) “Economists Free Ride, Does Anyone Else? Experiments on the Provision of Public Goods”, Journal of Public Economics 15: 295–310.CrossRefGoogle Scholar
  44. McFadden, D. and Leonard, G. K. (1993) “Issues in the Contingent Valuation of Environmental Goods: Methodologies for Data Collection and Analysis”, in J. A. Hausman, ed., Contingent Valuation – A Critical Assessment. North-Holland.Google Scholar
  45. Mitchell, R. C. and Carson, R. T. (1989) Using Surveys to Value Public Goods. The Contingent Valuation Method. Resources for the Future, Washington D.C.Google Scholar
  46. Morrison, W. G. and West, E. G. (1986) “Subsidies for the Performing Arts: Evidence on Voter Preference”, Journal of Behavioral Economics 16: 57–71.CrossRefGoogle Scholar
  47. Mäler, Karl-Göran (1993) Contingent Valuation – Does it Provide any Useful Information? (Comments to the NOAA Report).Google Scholar
  48. O'Hagan, John (1994) Dublin Theatre: An Economic Analysis of the _Abbey_. Paper presented at the 8th International Congress on Cultural Economics, Witten, Germany, August, 1994.Google Scholar
  49. Plummer, M. L. and Hartman, R. C. (1986) “Option Value: A General Approach”, Economic Inquiry 24: 455–471.CrossRefGoogle Scholar
  50. Portney, P. R. (1994) “The Contingent Valuation Debate: Why Economists Should Care”, Journal of Economic Perspectives 8(4): pp 3–17.Google Scholar
  51. Randall, A. (1991) “Total and Non-use Values”, in J. B. Braden and C. D. Kolstad, eds., Measuring the Demand for Environmental Quality. North-Holland, Oxford.Google Scholar
  52. Samuelson, Paul (1954) “The Pure Theory of Public Expenditure”, Review of Economics and Statistics 36: 387–389.CrossRefGoogle Scholar
  53. Samples, K. C., Dixon, J. A., Gowens, M. M. (1986) “Information Disclosure and Endangered Species Valuation”, Land Economics 62: 306–312.CrossRefGoogle Scholar
  54. Schneider, F. and Pommerehne, W. W. (1981) “Free Riding and Collective Action: An Experiment in Public Microeconomics”, Quarterly Journal of Economics 97: 689–702.CrossRefGoogle Scholar
  55. Schulze, G. and Ursprung, H. W. (1996) La Donna e Mobile – or Is She? Voter Preferences and Public Support for the Performing Arts. Paper presented at the 9th International Conference on Cultural Economics, Boston Mass., May 8–11, 1996.Google Scholar
  56. Smith, V. Kerry (1984) “A Bound for Option Value”, Land Economics 60(3): 292–296.CrossRefGoogle Scholar
  57. Smith, V. K. and Desvoughes, W. H. (1986) Measuring Water Quality Benefits. Kluwer-Nijhoff Publishing, Boston.Google Scholar
  58. Throsby, C. D. (1984) “The Measurement of Willingness-to-Pay for Mixed Goods”, Oxford Bulletin of Economic and Statistics 46(4): 279–289.CrossRefGoogle Scholar
  59. Throsby, C. D. and Withers, G. A. (1986) “Strategic Bias and Demand for Public Goods. Theory and an Application to the Arts”, Journal of Public Economics 31: 307–327.CrossRefGoogle Scholar
  60. Throsby, C. D. and Withers, G. A. (1983) “Measuring the Demand for the Arts as a Public Good: Theory and Empirical Results”, in William S. Hendon and James L. Shanahan, eds., Economics of Cultural Decisions. Abt. Books, Cambridge.Google Scholar
  61. Throsby, C. D. and Withers, G. A. (1979) The Economics of the Performing Arts. St. Martins Press, New York.Google Scholar

Copyright information

© Kluwer Academic Publishers 1997

Authors and Affiliations

  • Trine Bille Hansen
    • 1
  1. 1.AKF, Institute of Local Government Studies - DenmarkCopenhagenDenmark

Personalised recommendations