Triangulation of values using different valuation methods - CAVEAT

CAVEAT will identify and mitigate the caveats associated with current valuation methods when applied to culture and heritage capital to inform decision making. CAVEAT will explore how to best triangulate existing valuation techniques to assess the value of the stock (and flows) of a complex historic asset, such as a historic high street/neighbourhood, to improve decision makers' confidence when using such results in Social Cost-Benefit Analysis (SCBS).
CAVEAT addresses a key policy and knowledge gap. The protection of heritage assets requires investments in a regime of scarce resources. Historic England's High Street Heritage Action Zone (HSHAZ) programme is an example of how conservation areas may require coordinated actions. Historic High Streets are currently suffering from the impact of businesses closures, and without investment in their conservation and requalification, cities lose a central part of their heritage.
A business case for investment requires decision makers to compare costs and benefits of the intervention within a Social Cost Benefit Analysis (SCBS) framework. The main problem they face is to fully account for the economic values (both use and non-use) associated with a cultural asset and articulate their social benefits, which cannot be captured by simple market transactions. A heritage asset is more than its real estate value, or the value people associate with its use. The non-use value, linked to the cultural, aesthetic, and symbolic quality of the asset and/or the emotional attachment that communities have toward it, define such asset as heritage (Throsby, 1999). The only methods able to capture the non-use values associated to cultural heritage are survey-based techniques such as choice experiment and contingent valuation, which can be used to express in monetary terms the social benefits associated to the conservation of historic assets.
CAVEAT applies several economic valuation techniques to the same historic high street in an English medium sized city to assess the use and non-use values, and understand the reasons for possible divergence in estimates, sources of bias and ways of minimizing them. These techniques capture use values (such as hedonic pricing (HP) and travel cost (TC) methods) and non-use values (contingent valuation (CV) and discrete choice experiment (DCE) methods). It investigates sources of biases, such as embedding effects (the problem of lack of variation of estimates with respect to the scope of the good) and information effects. It explores the role played by emotional attachment of respondents and compares the estimates of values obtained within the hypothetical setting (CV and DCE) with real-world experiments, where actual transaction for non-use values take place. The results from CV and DCE are then tested against a comparable historic high street in another English city. This tests the reliability of results using benefit transfers (inferring the expected values at the comparable site from results obtained from the first site) between the two sites and suggests ways to minimise possible transfer errors.
The main outcome of the project is a guidance for researchers and decision-makers on how to effectively and efficiently triangulate valuation methods for complex assets such as historic high streets/historic neighbourhoods and how to minimise potential biases. CAVEAT provides a framework for the development of future studies. The research will impact the UK cultural sector and beyond. The project team involves two key international heritage stakeholders ICCROM and ICOMOS, engaging governments and experts worldwide.
The project team encompasses expertise from various disciplines (architecture, urban planning, heritage conservation, cultural economics, environmental economics, heritage advocacy, policy making support) who have worked on these themes before and are committed to an interdisciplinary approach.