The Value of Cultural Heritage Sites in Armenia: Evidence From a Travel Cost Method Study

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Once the demand function has been estimated, the consumer surplus provides an
approximation of the welfare associated with visiting the site. Formally, based on
equation (4), the consumer surplus is equal to:

(5)                 CS ( p о, qо) = - 1_r r„

β₂

where ro is r* in equation (4) for the initial levels of quality (here, q=0) and price:
^r0 = ^exp( ^βo ^{+ β}1 w ^{+ β}2 P 0).

The surplus change brought by a quality improvement is:

(6)           ΔCS = CS(P1,q_l) - CS(p0,q0) = -ɪ[r -r⅛],

β₂

where r₁ = exp(β_o + β₁w + β₂P₁ + β₃), where P₁ is the new price level. In our
questionnaire, p₁ = p ₀ in the first contingent behavior question, and p₁ = 1.2 ∙ p ₀ in the
second.

C. Econometric Model.

Given the relatively few annual trips to our sites, a count data model is the
appropriate model for the number of trips Y. We specify a Poisson model with

individual-specific λij:

where λ>0 is the parameter of the Poisson distribution (which is equal to both the
expected value and the variance of Y_lj ), λ_lj = exp(x_ljβ₁ + p_ljβ₂ + q_jβ₃) , x is a vector of
determinants of visits to the cultural heritage site (including income), p_lj is the price per

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