ABSTRACT
The CV method (Mitchell and Carson, 1989) was used to elicit the economic benefits of the preservation and improvement of the My Son cultural heritage. The individual’s compensating variation for the proposed improvement is given by:
U Y Q U Y WTP Q( , ) ( , )0 1= − (10.1)
where U represents the indirect utility function of an individual, Y is the income level, Q0 is the current condition of the site, Q1 is the improved condition, and WTP is interpreted as the maximum amount that the individual would be willing to pay to secure the improvement. For empirical estimation, the WTP welfare measure is specified as:
WTP Xi i i= +β ε' (10.2)
where Xi represents a vector of explanatory variables, β is a vector of parameters, and εi is the error term reflecting unobserved taste components. The parameters of this equation can be estimated by the maximum likelihood method (Cameron, 1988). The total benefits can be calculated by summing up the aggregate benefit for each group of respondents. With each group, we aggregate using the sample mean WTP multiplied by the corresponding number of visitors. The sample of each group is randomly selected and is assumed to be representative of all visitors of that group to My Son in the year of study.
