Friday, July 30, 2010

Monumental Economics: How Many Pennies is the Lincoln Memorial Worth

I once had a conversation with someone where they complained economists can put a price on anything, even a tree (see problem 5.5 in your workbook). This weekend my brother and his foster daughter are visiting and we'll be touring DC monuments, including the Lincoln Memorial. Can we put a value on the Lincoln memorial? Like a tree the value of the Lincoln Memorial includes both the raw materials, land, and the joy it brings to those who visit it and for those who like to know it's there.

First sometimes economists use travel costs as a way to proxy for value. If someone spends $500 to visit the Grand Canyon, then we might say the Grand Canyon is worth $500 to them. One way to figure out the value of a place is to add up the value of all the trips people took to visit it.

If something is free like the Lincoln Memorial you might ask people how much they would pay to visit it. You might also ask how much would you pay to keep the Lincoln Memorial. For example I might never again visit the Wailing Wall in Jerusalem, but I might be willing to donate $5 to save it. Surveying people about their value of how much they would pay to visit or protect something to estimate its value is called contingent valuation. Just this morning NPR did a story on the value of a Pelican.

I could not find a study on the value of the Lincoln Memorial. But I did find this quote from Robert Solow "it makes perfectly good sense to insist that certain unique and irreplaceable assets should be preserved for their own sake; nearly everyone would feel that way about Yosemite or, for that matter, about the Lincoln Memorial, I imagine”

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1 comment:

Raija said...

I think this is the right link to the NPR story...I happened to be looking for it and came across your blog.