Wednesday, January 07, 2009

On Trowulan brouhaha

The media has been reporting public disappointment toward the development of Majapahit Information Center right on the cultural site of the historical Trowulan Museum in Mojokerto, East Java (eg Kompas, 4/1/2008). Underneath the site lays a huge set of archeological artifacts that records the glory of the Kingdom of Majapahit.

The local government and the Ministry of Culture and Tourism are under fire. The project was initially a part of a bigger initiative to save cultural heritages in the area. Presumably the future management would need some kind of information center to serve the public. Alas and ironically, the information center is being built with significant damage to the heritage! Hence the angst.

This is another area where economics should have been helpful. Nowhere in the media is a mention of how much the cultural site is really worth. Economic valuation helps to quantify this kind of value, taking into account your and my valuation regarding the site, regardless of whether or not we 'use' the site (if not, we're talking about 'non-use' value). It is true that measuring the value of 'non-market' goods like cultural heritage is damn difficult, if not ridiculous. But economics profession has come to establishing tools for such that. For example, 'contingent valuation' technique has been improved so well after its famous 'test-case' in the Exxon-Valdez oil spill in Alaska twenty years ago. This technique is relying on people perception. The other technique, hedonics approach uses the value of something else that can be directly priced in market (eg house) as a 'surrogate mother' of the price of the non-market good (eg cultural heritage). It has been successful in estimating the economic value of clean air, for example.

Of course we can never measure such things in an exact, accurate manner. But the fact that many people are angry about the Trowulan destruction is a clear indication that the thing has a non-zero value. Most importantly, for public good like cultural park, public money (ie tax) is at stake. The rule for any project is 'go when the net benefit is positive'. Net benefit means benefits minus costs. It is easy to measure the costs (labor, tractors, etc). But measuring benefits is no piece of cake. It is in this case the measurement of non-market good: how much people put a value on the historical site. We have now science for that.

One thing needs to be said though. The measurement does not necessarily end up in favor of keeping the heritage. It might be the case that the information center development is justified! It might sound unpopular, but it's not you or me or some random artist and culture lover to decide. It's us, the people with different interests, collectively. If you're not comfortable with that, try think about this: once upon a time the world was full of dinosaurs. We love dinosaurs. But do we really want them to come back alive now? Well, maybe one or two in a cage might be cute. Who decides?

I wish I could do something on this Trowulan thing. I feel a little bad that my valuation works have been applied in another country, while I can't really use them at home. Science itself is expensive, unfortunately. Anyone interested to collaborate?


Anonymous said...

Agree bang aco. I’m interested to collaborate, but not to funded..=)

Unfortunately, economic methodology for valuation of non use/intangible value from historical site never been introduced to Indonesian archaeologist/government official (I wish they read about econ valuation on Valdivia, Chile).
In general; now, if we assumed they already knew and doing research (hedonic pricing, CVM, etc) on historical site project appraisal.. the net benefit from historical site might be negative based on low WTP and high opportunity cost of historical site preservation (as a costs).
Appreciation on culture and history (WTP) is likely related with income, education level and social welfare, isn’t it? Or you have better opinion on this?
Well, this is a cynical comment of Indonesian cultural economics.

Bawono Aji

Alief said...

Mas Aco, this book
can be good reference. Furthermore, it doesn't have to be CVM or Hedonic Price, does it? Why not use Benefit Transfer? It would be way cheaper than those two methods.

Pak Bawono Aji, there is a study on the same issue on My-Son cultural heritage, Vietnam. If you agree that Indonesia and Vietnam have the same level of developments (hence income, education level and social welfare), you might want to consult the results.


Anonymous said...

Thanks 4 those links, mas alief.


Aco said...

Aji, Alief, thanks for the comments and links.

Aji, that was my hypothesis, too. But it still has to be tested. It is possible that those living in the vicinity of a cultural heritage area don't care much, given their own income level (and demographics: edu, etc). But other people do care. Someone living reasonably far might have very high willingness to pay to protect the area (hence the non-use value). Researches have shown that this should not be underestimated (eg studies on conservation of Chinese panda, etc). So it is still possible that the value of Trowulan heritage is very high.

Alief, yes, we probably can use benefit transfer method. But I should be honest with you: I've never done that. (Something I'm not very comfortable with is exactly the transferring of values from one different place to another -- but again that might be because I'm not keeping up with supposedly many improvements to date). So you go home and help us do this :D So far I'm fine with hedonics and conjoint analysis. I think they can be used albeit expensive (in fact one of my former collaborators have been applying conjoint choice experiment for valuing the cultural heritage in ... ugh I forget, I don't have it handy now, sorry)