Economic Valuation of Menelik II Historical Site in Entoto Hill Using Travel Cost and Contingent Valuation Methods

Abstract

Economic evaluations have shown to be crucial tools for enhancing the management and preservation of cultural resources. This study's primary objective was to evaluate and calculate the total economic worth of the historical site Menelik II using a methodical, analytical approach. The individual travel cost method and contingent valuation method were used to estimate the total economic value of the site. A questionnaire has been used to collect data for travel cost method 120 and contingent valuation method 119 from site sample visitors through face-to-face interviews for the analysis. The truncated poison model is employed for the use benefit estimation, and the bivariate probit model is used to estimate the non-use value of a historical site, Menelik II. The regression results obtained from the travel cost method showed that travel costs, visitor’s income, and travel distance were important determinants of the recreation demand for the site. On the other hand, the results of the contingent valuation method showed that offer bid price, education, income, family size, and distance from the historical site of Menelik II were important determinants of willingness to pay. As estimated by the count data model, the study found the mean consumer surplus per individual to be 664 Ethiopian Birr per year, and the total use value of the site is approximately estimated to be 10,388,280 Ethiopian Birr. On the other hand, the estimated mean willingness to pay of the bivariate probit model is 25.59 Ethiopian Birr, and the total nonuse value of the site is approximately estimated to be 44,904,666.66 Ethiopian Birr. Therefore, the total economic value of this historical site, which is the sum of use and non-use value, is estimated to be 55,292,946.66 Ethiopian Birr. This suggests that there is a strong economic case for the conservation of the historical site and improving cultural heritage management.