being determined by the circumstance explained in relation to figure 9.5. For the alternative use, the commercial marginal economic value (CMEV) curve MPN, similarly shaped to that for tourism, runs from right to left. The use of the resource is optimized at PQ, where tourism’s use is OQ and commercial fishing’s is MQ. This is signified by the fact that at point PQ the value of tourism is greater than commercial fishing, clearly, from PQ towards M the value of commercial fishing is greater. The decline in the value of tourism can occur because of a number of factors, such as overcrowding, disturbance, pollution and visual intrusion, that lead to a decline in the number of visits and thus the tourism value generated by the resources. The reason for the decline of the value of commercial fishing is explained in the next paragraph.
The total value of tourism is the area under the curve OPM and for commercial use it is the area under the curve MPN. The curve for tourism is based on the assumption that tourism is likely to be compatible with other uses, including in the example commercial fishing; it may also possibly contribute to the conservation of the resource and its wildlife. Hence its total economic value is shown as being larger. Conversely, the commercial total economic value, on the supposition that it is solely fishing, is lower, the value becoming zero at N before it is the only user of the resource. This accords with the maximum sustainable yield thesis, given in chapter 9 , that the stock is unable to reproduce itself when it falls below a critical mass and thus a viable recruitment level. What total value is for each use is an empirical question; Young (2003) indicates in the Baja California case that the value generated by tourism is greater than commercial use.
It can be posited that the respective curves are the net marginal economic values (NMEV) after taking account of their use (exchange and consumer’ surplus) and non-use ( option embodying existence and bequest) values, examined above in the exposition of TEV, which is akin_ to marginal private benefit (MPB). Also, it is possible to conceive that marginal social benefit (MSB) has been added and the marginal private cost (MPC) and marginal social cost (MSC) deducted, as shown in figure 9.4.
The application of TEV to tourism, bringing out the distinction between static and dynamic benefits, is demonstrated by an example of the role of heritage conservation and tourism in urban economies, particularly the generation of post-industrial towns and cities. Attention is concentrated on the built environment. Cities, it is argued, have ceased to have an important function in the direct production and distribution of goods. Rather they are reverting to the functions that they had before the industrial revolution as sites for administrative service, business and commercial activity, as generators of cultural services and, increasingly, as the providers of urban amenities, both enhancing the quality of life of their residents and providing the economic base for urban tourism and other leisure-oriented service activities. The key difference with the pre-industrial era is that the set of activities identified above now contributes a growing part of urban economic output and welfare.
The likelihood of an urban area succeeding in changing its function in this way depends, in part, on, for example, its location, culture, legacy of historic buildings, conservation areas and open spaces. If the city or town can both make the best use of its inherited assets and change its function, intervention will assist the regeneration of the local economy. By investing in conservation policies for architecturally significant buildings or areas, public agencies may encourage owners of adjoining properties to upgrade them. People with new skills can be encouraged to move into those areas or skilled people persuaded to remain there. This could lead to new business being located in the conserved building /areas and, in turn, facilitate the emergence of new business creation. In effect, the implication is that public spending fills a gap that the market, left to itself, would not see for example Davis and Whinston’s (1961) neighbourhood effect. The initial public investment also acts to give leverage to further private investment, both in upgrading other buildings in the area and in