Non-Market Valuation of Cultural Heritages in Ethiopia Using Travel Cost and Contingent Valuation Methods: An Application to Rock- Hewn Churches of Lalibela

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Addis Ababa University


The value of cultural heritage such as the Rock- Hewn Churches of Lalibela (RHCL), cannot be obtained using market price. Non market valuation technique has to be used to value them. However, such studies in the developing world in general and Ethiopia in particular are scarce. Therefore, the main purpose of this study is to estimate the total economic value of RHCL using non-market valuation methods. The total number of respondents used in the empirical analysis was 200. The study uses the Individual Travel Cost Method to estimate the use value of RHCL and the Dichotomous Contingent Valuation Method to investigate the mean WTP for the non use value of the RHCL. The truncated negative binomial method (TNBM) was employed to derive the demand function for use value of RHCL. The logit model and bivarite probit model were used to estimate the non use value of RHCL. To know basic determinants of maximum WTP we also applied the standard Tobit model. The regression result showed that travel cost, monthly income, age, education and knowledge are important determinants of the recreational demand of the site. On the other hand, the first bid price, the second bid, monthly income, and gender are important determinant of WTP for the non use value part of the site. The Tobit model depicted that income gender and age are important determinants of the maximum willingness to pay (MWTP). The result of the study also showed that the potential annual use value of the RHCL was estimated to be 759,687,113 ETB per annum and the annual non use value of the site is 42,525,661 ETB. Therefore, the annual total economic value of the site is approximately 42 times higher than the current revenue. Furthermore, the entrance fee that would maximize income was 11.32 USD per four days. Finally, we recommend that efforts should be made by the government and other relevant stakeholders to improve the site and maximize the benefits that can be derived from the RHCL. Future research areas are also suggested



Cultural Heritage, Resource and Environmental Economics