Sunday, July 06, 2008
Pompeii is crumbling, according to a recent article in Reuters (and to various coverage in the Italian press). This is due to general neglect, resulting in disintegrating stonework, loss of 150 msq of frescoes a year (according to estimates) and more. Furthermore, there is supposedly an illegal rubbish dump accumulating on the site of newer excavations to uncover more of the ancient city, supposedly as a consequence of the rubbish crisis in Naples. All of this gets me to thinking, how would something like this be overcome? Firstly, Pompeii is not only an Italian national treasure, I believe that it is a treasure for the world, which seems to be consistent with its estimates 2,5 million visitors each year. Having visited Pompeii last year it believe it would be truly tragic for us to lose more and more of this fantastic site.
Anyway, so this gets me thinking, as I do, as to the economics of this specific site. So I managed to obtain the following information on the cost of entry to the Pompeii from the Pompeii website:
Single ticket - valid for 1 day
Full price: € 11.00
Half price: € 5.50 (*)
access to 5 sites: Herculaneum, Pompeii, Oplontis, Stabiae, Boscoreale) - valid for 3 days
Full price: € 20.00
Half price : € 10.00 (*)
Free of charge: for EU citizens under 18 or over 65 years old.
(*) Reductions: for EU citizens aged 18-24 and EU permanent school teachers.
Now, the one day ticket for Pompeii is €11, or €5.50 reduced. If we assume that entry into Pompeii is fairly inelastic and that individuals are willing to pay as much as they would for, say, the Colosseum then we can make some really basic calculations on how much more revenue they could receive. Consider that of the 2,5 million visitors say 80% pay the full price and 20% get the ridotto.
If they were currently getting:
2 000 000 * 11 + 500 000 * 5.5 = 24 750 000
This could increase to
2 000 000 * 16 + 500 000 * 8 = 36 000 000
Which is a fairly substantial margin (though as I say below, not enough at all).
Consider that they increased the price further, with more nuanced packages about what you visit and so forth. Could they increase their revenues more? Has anyone estimated the elasticities of demand for these sites? Are they fairly inelastic? Are they more responsive to changes in exchange rates than they are to the costs of entry? I think this would make a fantastic topic of research for someone in Italy in tourism and econ.
I have No Knowledge Whatsoever of the costs of maintaining this site (though my art historian wife (below) assures me they would be astronomical) , but I believe that €12 million would probably do almost nothing to cover the costs. So what does this mean? It means that either there must be a movement for greater private donations, or greater government investment, or both. In an area like the south of Italy where there is substantial unemployment I think that this probably could be used as a way to create a decent amount of employment for residents, as well as possibly the offering of opportunities to students who are interested in archaeology and related subjects. Granted the procedure that I am going through here is particularly naive with respect to the costs of preservation and so forth, but to me this is doing my little, tiny bit to try to make people aware of this loss of this international heritage site.
I have No Knowledge Whatsoever of the costs of maintaining this site (though my art historian wife (below) assures me they would be astronomical) , but I believe that €12 million would probably do almost nothing to cover the costs. So what does this mean? It means that either there must be a movement for greater private donations, or greater government investment, or both. In an area like the south of Italy where there is substantial unemployment I think that this probably could be used as a way to create a decent amount of employment for residents, as well as possibly the offering of opportunities to students who are interested in archaeology and related subjects. Granted the procedure that I am going through here is particularly naive with respect to the costs of preservation and so forth, but to me this is doing my little, tiny bit to try to make people aware of this loss of this international heritage site.
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