ECONOMIC VALUATION OF CULTURAL HERITAGE: THE IMPORTANCE OF DETERMINANTS OF DEMAND

Abstract

Economic valuation of cultural heritage is challenging because of the specific nature of culture and heritage. Different methods have been developed and used in past few decades and those, among other things, result in deriving a demand function for specific site. Previous research and studies of cultural heritage sites mostly used different regression models to estimate the importance of certain determinants of demand using different methods. The aim of this paper is to explore and identify determinants of demand for a few cultural heritage sites in Herzegovina, south part of Bosnia and Herzegovina, and asses their importance using Structural Equations Modelling (SEM). One of the main advantages of SEM is that it can be used for variables that are difficult to quantify which is important in case of cultural heritage. This method was selected because it is appropriate to study the relationship between concepts and specify structural and measurement model for all selected locations. By comparing results of analysis on different sites in Herzegovina conclusions can be made on importance of specific demand factors and that information is useful for local authorities while creating strategies and plans for development of tourist industry.