| 6.1 | Summary of Findings |
The study provides three types of previously unavailable information about the expected benefits from reduced injury to marble monuments as a result of Title IV emissions reductions: (1) attitudinal information about the existence and preservation of a set of nationally significant marble monuments; (2) evidence that significant benefits are associated this type of injury reduction; and (3) estimates of WTP to reduce pollution-related injuries to outdoor marble monuments in Washington, DC.
| 6.1.1 | Summary of Findings Regarding Attitudes |
Responses to attitudinal questions indicate that people care about the existence of the marble monuments in Washington, DC, and that reasons related to passive use such as having the monuments available for use by future generations tend to be more important than reasons related to personal visits to the monuments. The highest rated reason that monuments are important is that monuments commemorate and honor significant people and events in history. These responses suggest that valuation approaches that focus on visitation to monuments (direct use value) may miss the most important benefit of monument preservation.
People care about the existence of these monuments well beyond their own lifetimes, and for a long enough period of time that changes resulting from Title IV would become evident. One of the questions about which we had no information at the beginning of the study is whether people's concern about the existence and condition of the monuments extends for a long enough time period that the Title IV induced changes would matter to them. About 86% of the respondents said that they care about the condition of the monuments beyond their own lifetimes (more than 50 years from now), and 44% said they care about the monuments' condition for at least the next 1000 years. This is consistent with the emphasis on the importance of having the monuments for future generations.
With the aid of illustrations, respondents understood the physical injuries to marble monuments caused by natural and pollution-related weathering. They reacted similarly to the different types of injury shown: one type of injury was not noted as detracting more than the other. People care about how the physical injuries affect the appearance of monuments, and most think the injuries detract from the appearance. The most important concerns noted are that the detraction in the appearance shows a lack of pride in heritage and lack of concern for history. Thus, the injuries are seen as detracting from the most important purpose of the monument, which is to communicate the message of remembering and honoring people and events in history.
It has sometimes been suggested that the materials benefits of Title IV can be bounded by estimates of the replacement costs of the materials. However, this valuation approach implies that no value would be lost if the original material is lost but replaced with equivalent material. This may be a reasonable assumption for many resources, but not necessarily for historically important monuments. We asked respondents if they agreed or disagreed with a statement that something of value is lost when an original monument is replaced with a replica. The responses indicated a wide range of opinion on this. About 38% agreed that something of value is lost, about 44% disagreed, and 19% marked themselves on the midpoint. It seems that those who focused on the historic value of the monument itself felt that something is lost when the original material is replaced. Others focused on the message of the monument and felt that is not impaired by replacement of the original material. For a significant share of the population, we conclude that a monument's replacement cost may not be a good indicator of preservation benefits.
The attitudinal data show noticeable demographic influences. For example, Caucasians tended to express more concern about the existence and condition of the marble monuments in Washington, DC than non-Caucasians. A few of the non-Caucasians explained this with comments that these monument do not represent their history. Women tended to express more concern about preservation of monuments than men. Some income differences were detectable: respondents from households with incomes below $12,000 and in the $12,000 to $25,000 ranges expressed more concern about the existence and condition of the monuments than respondents from households with higher incomes. The extent to which people care about the existence and condition of these monuments does not depend on whether or not they have visited the monuments.
| 6.1.2 | Summary of Findings Regarding Valuation |
The focus of this study was the development and pilot testing of a valuation approach for a reduction in pollution-related injury to marble monuments. On the whole, the valuation approach worked well. The description (including the map and photographs) of the monuments and the types of injury seemed clear and understandable to respondents. The presentation of the change in injury used the photographic series showing varying levels of injury and the time lines showing varying time dimensions for when each level of injury would occur. We were pleased with the effectiveness of this presentation in communicating the nature of the injury and the time element of the valuation question. It communicated the key element of the valuation question, which is the value of a program that would increase the time it would take before a given level of injury would occur, but that no program would prevent this injury from ever occurring.
The preservation treatment program was another important element of the valuation scenario. Although it was fabricated for the study, respondents considered it a realistic program. Use of this artifice allowed us to present a good that achieved the same injury reduction to marble monuments as that expected to be achieved by air pollution reduction without having to account for all the other potential benefits of an air pollution reduction. One limitation of this approach was that some respondents reacted by thinking about what might be a reasonable cost for such a treatment program, when what we wanted them to focus on was the value of the injury reduction it achieved. The presentation was modified to minimize this tendency to "cost calculate." In general, we expect that this tendency to reduce WTP values because respondents would not agree to prices they perceived as higher than what they thought might be a reasonable per household cost for such a program.
The pair-wise elicitation format selected for this study is a recent addition to the set of survey tools used by economists to estimate WTP (although it has been used for many years by other disciplines), and it is increasing in popularity. Our experience in this study indicates that it has many desirable features as an elicitation format. For example, there were minimal refusals, inconsistencies or negative comments in the respondents' responses to the pair-wise choices and follow-up questions. This format also easily accommodated multiple quantities and prices without raising objections that respondents would consider only their most preferred option. It also allowed us to obtain individual reactions to a range of price and quantity combinations, increasing the effective sample size over one or two referendum questions. Finally, the resulting data generate a WTP model that correctly predicts actual choice 75% of the time, which reflects reasonably good explanatory power. Some methodological questions remain that deserve further exploration in future research regarding this elicitation format. These are discussed below.
Table 6-1 shows the mean and median household WTP estimates derived for male respondents from the pair-wise model. These are one-time household payments for permanent shifts in the rate of pollution-related injury to outdoor marble monuments in Washington, DC. In addition to the level of preservation which was a highly significant factor in the choice model, several demographic variables were also significant. With the exception of income, these influences were consistent with those seen in the attitudinal responses. The model showed that WTP values are higher for women, Caucasians, and people with household incomes above $12,000. The level of income above $12,000 did not appear to be a factor in WTP. It also showed that WTP values tended to increase with age of the respondent, but did not depend on whether a respondent had visited the monuments. Given that the WTP amounts are for households, not individuals, and because we do not have information regarding the decision making process among males and females within a household, the conservative approach is to use the smaller of the two, the estimates for males.
Table 6-1 also reports confidence intervals for the mean WTP estimates, and related perpetual payments. These payments illustrate the magnitude of annual payments that are equivalent in present value terms if we assume payments are made in perpetuity and the rate of discount is 7%.
The reasonableness of the pair-wise results was assessed in several ways in addition to the statistical evaluation of the choice model. First, a payment card WTP questions was asked as a follow-up to the pair-wise choices. This is not an independent test of the two elicitation formats because one preceded and could have influenced the other. However, it does provide a confirmation test of the pair-wise model results. The payment card has been studied more carefully as a valuation elicitation format than the pair-wise choice format. Responses to the payment card questions do not appear to be correlated with which of the twenty sets of pair-wise choices was presented to the respondent. Estimates of WTP based on the payment card responses tend to be somewhat lower than but in the same range as the WTP estimates based on the pair-wise choices.
| 6.1.3 | Comparison of Findings to Other Studies |
We are not aware of any studies that have estimated WTP for reductions in air pollution injury to marble monuments, so our ability to make direct comparisons of our findings to other studies is very limited. In this section we note the findings of a few studies that have estimated WTP for preservation of specific cultural resources and for reductions in air pollution in general. None of these are directly comparable estimates, but they give some sense that our results look reasonable by comparison.
In the most comparable study, Navrud et al. (1992) estimated average individual WTP values for a reduction in air pollution related injuries to the Nidaros Cathedral in Trondheim Norway of 318 NOK, or $51 (1992 US$), for a one-time payment. They surveyed visitors to the cathedral who might have higher values for preserving the cathedral than non visitors, but found that passive use motivations tended to be more important to respondents than personal use. These WTP estimates are similar in magnitude to our household WTP estimates for reducing air pollution injury to a set of national monuments in the United States.
Two other studies establish fairly wide bounds for WTP for preservation of selected cultural resources. Grosclaude and Soguel (1994) estimated annual household WTP for maintenance of specific historic buildings in Neuchâtel, Switzerland at SFr 120, or about $85 (1992 US$). These were values for local residents and are considerably higher than our one-time household WTP estimates. Willis (1992) found average WTP per visit of £0.69 to £0.86 ($1.22 - $1.52 in 1992 US$) for a fund for maintenance of the Durham Cathedral in England.1 Many of the visitors who were surveyed at the cathedral made several trips to the cathedral per year, so the WTP per trip values underestimate average annual WTP.
Finally, our WTP estimates are consistent with annual household WTP values for reduction in air pollution in two eastern U.S. cities. McClelland et al. (1991) conducted a contingent valuation study in Atlanta and Chicago to estimate WTP of local residents for an air pollution reduction of a magnitude comparable to what was expected in eastern cities under Title IV. The air pollution reduction was presented using photographs showing a range of pollution levels and a reduction in number of poor air quality days such that about a 14% improvement in average visual range would be realized. Respondents were asked their maximum annual household WTP for this reduction and then asked to allocate their total WTP among the various effects of air pollution that would be reduced. The final mean WTP estimate, after a downward adjustment the authors made for estimated response bias, was $118 (1996 dollars). The average split among the various pollution effects was: $25 for reduced soiling, materials, and vegetation effects, $22 for visual air quality improvements, $58 for reduced human health effects, and $13 for other reduced effects. This study did not ask for WTP for air quality improvements in locations other than the city where the respondents lived. WTP for reducing air pollution injury to marble monuments in Washington, DC, would therefore be in addition to WTP for local air quality improvements for most residents of the United States. Compared to an annual WTP for reducing local soiling, materials, and vegetation injury of $25 per household, a one-time payment of $40 to $80 for reducing injury to marble monuments in Washington, DC seems plausible.
| 6.2 | Implications of Valuation Results for Title IV Assessment |
One objective of this research was to obtain valuation information to assist in the assessment of the benefits to Title IV air pollution emissions reductions. We would like to apply our results as generally as possible, ideally extrapolating these results to the entire U.S. population. However, we do not believe that this can be done from the current sample data. We believe there are variables not included in this model that partially explain the WTP of people across the United States, for example, distance from DC, region of residence, rural/urban, and ethnicity (in greater detail than Caucasian and non-Caucasian). These variables do not appear in our model because there is insufficient variation within the sample to provide any explanatory information about the respondents' pair-wise choices and, thus, WTP.
It is possible, though, to extrapolate these results to the study population, which is the 2.2 million households within a 10-mile radius of the four survey locations. To do so, we must weight the WTP of the respondents to correct for the fact that their demographic characteristics are somewhat different from those of the study population. Aside from gender, the demographic characteristics included in the model are age, ethnicity (Caucasian and non-Caucasian), and income (income £$12,000, income >$12,000). Table 6-2 shows the proportion of the sample and the study population for each of these characteristics. The data for the study population come from the 1990 Census.
The sample underrepresents those under 35 and over 65, non-Caucasians, and having low income. To estimate the mean and median WTP of the study population, we weight the individuals in our sample so that they reflect the demographics of the study population. That is, when calculating the mean WTP, we need to give relatively more weight to the WTP amounts of the households that are underrepresented, based on the degree to which they are underrepresented.
The following analysis is a preliminary step toward accurately weighting the sample to represent the study population. It is preliminary because we assume that age, low-income status, and ethnicity are not correlated, which is most likely not the case.
Weights are calculated for each individual for each of the three characteristics. The weights are calculated as follows:
For example, the income weight for a low-income respondent is 20.2/8.12, or 2.49; the income weight for a respondent who does not have low income is 79.8/91.89, or 0.87. For each set of weights (age, low-income, and ethnicity), the sum of the weights across all respondents is normalized to equal one.
If we were weighting the sample on only one characteristic, the new WTP amounts would be the preweighted WTP amount times the weight for each household. Since we are weighting on more than one characteristic, each individual's weight is the product of the three weights, normalized so that the sum of the products across all individuals equals one.
Table 6-3 includes the weighted WTP estimates representing the study population. Again, these are calculated as though as all individuals are male.
Since the sample underrepresents non-Caucasians and low-income households, and since these groups have a lower WTP, the weighted estimates are lower than the sample estimates. (The effect of weighting for age alone changes the mean WTP only slightly.) These estimates are likely to be conservative because of our assumption of independence among income group and ethnicity. Since income and ethnicity are not independently distributed variables, the assumption that they are will overweight the WTP of non-Caucasians and low-income households, yielding lower than actual WTP amounts.
What is needed to generalize our WTP estimates to a larger population is a broader geographic sampling of respondents and further assessment of potential response bias in a broader sample (see future research discussion below).
Assuming that the WTP estimates in Table 6-3 are sufficiently representative of average household WTP for the study population (2.2 million households), aggregate estimates would be those shown in Table 6-4.
| 6.3 | Suggestions for Future Research |
There are three key areas in which this research effort might be usefully extended:
Building on this survey instrument and collecting an national sample could be approached in different ways. Probably the most cost effective approach would be to develop a mail survey version of the instrument. A mail survey would allow national sampling to be done at a much lower cost per completed questionnaire than in the group survey or in-person individual survey approach. The instrument would need to be pretested to assure that the information previously conveyed by the survey administrator was adequately communicated to respondents through written materials and illustrations. With adequate survey resources, alternative versions of the survey could allow analysis of several factors of interest including alternative baseline injury time lines (the without Title IV baseline), alternative injury reduction levels from the three included here, and possibly some of the pair-wise methodology questions listed below. The range of dollar amounts used in the pair-wise choice and payment card formats should be extended to cover higher amounts, because a higher than expected share of respondents were saying yes to or selecting dollar amounts at the highest end of the range offered.
Extending the valuation work to other cultural resources would require more valuation instrument method development. A logical first step would be to extend to outdoor marble monuments in other locations. This is complicated by the uncertainties about how all marble monuments will be affected by SO2 reductions. These uncertainties stem, in part, from incomplete inventories of the outdoor marble monuments throughout the eastern United States, incomplete information about the nature and extent of current and future baseline injury rates, and uncertainty about how SO2 reductions will affect future injuries. Such uncertainties increase the difficulty of describing a much larger set of marble monuments and describing a plausible preservation program.
One possible approach would be to add valuation questions for monuments of local or regional significance, which would be preceded by a brief description of local monuments. This approach would indicate incremental WTP for preserving local and regional monuments. Assuming WTP depends on demographic characteristics and the size and condition of the local/regional stock, the results might be transferrable to areas not surveyed.
Alternatively, respondents could be asked WTP questions for "all" monuments and asked what share of their total WTP they wanted to go to the Washington, DC set, and other subsets such as other monuments of national significance, monuments of local/regional significance located in their area, monuments of local/regional significance located elsewhere. The difficulty with this approach is making the preservation program plausible enough for people to believe that it can achieve the injury reductions claimed. Furthermore, testing would be needed to determine the sensitivity of WTP to the perceived size of the set of all monuments, and to different assumptions about baseline injuries and injury reductions associated with SO2 reduction.
Methodology questions regarding the pair-wise elicitation approach that would be useful to consider in future research include:
1. These are the mean values calculated from the reported value ranges and number of respondents selecting each range as their maximum WTP.
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Last Update: 1-12-98