Contingent valuation and historic shopfronts: Putting a ‘price’ on priceless architecture

Let’s be honest, if you clicked on this article expecting a nail-biting read about contingent valuation, I salute you. For most, a five-minute stroll through economic methodology doesn’t exactly scream “must-read”. But throw in some historic shopfronts – we’re talking about the kind of heritage you might walk past on your way to the local chippy – and we might just get somewhere. Stick with me, there’s more drama in valuing heritage than you might think.

In this blog, I will reference the contingent valuation study I completed in 2024 as part of a wider evaluation of Historic England’s High Streets Heritage Action Zones programme. In doing so, I’ll reflect on how contingent valuation (for brevity let’s call it “CV”) can be used to value non-market goods, and why bespoke studies are so important when it comes to valuing heritage. If this is all getting too much already then don’t worry, as I promise not to get lost in the maze of multivariate regression and other statistical techniques used in CV analysis (apologies to the econometrician fraternity).

Before we dive in, I should note that AMION Consulting led the wider evaluation of the High Streets Heritage Action Zones programme. My CV study was one cog in a much bigger machine. You can read all about the wider evaluation here. On a personal note, my CV research also doubled as my MSc Applied Economics dissertation – many thanks to AMION for the professional support.

So what on earth is contingent valuation?

CV is a way of asking people how much they’d be willing to pay for something that doesn’t have a market price – in the case of my study, the wellbeing value associated with improvements to historic shopfronts. In the world of non-market valuation, this sits within what’s called a “stated preference” method, meaning we ask people to state their preferences directly, usually through a survey. It’s like saying: “imagine your local high street gets a facelift, how much would that be worth to you?” Straightforward in theory, a bit fiddly in practice. There’s also the “revealed preference” camp, where instead of asking people what they’d pay, you try to infer it from their actual behaviour in other markets.

For example, if homes near a conservation area consistently sell for more, you might use something called “hedonic pricing” to isolate the value people place on heritage charm (think original sash windows, stone detailing, or a front door from a time when Amazon wasn’t a thing).

CV though is a well-established approach, particularly for valuing cultural and environmental assets, and is endorsed by the Department for Digital, Culture, Media & Sport (DCMS) for use in public sector appraisals. That said, it’s not without quirks. Ask someone if they’d pay £10 to keep their local high street looking lovely and you might get anything from “of course!” to “not a penny, I shop online”, or “shouldn’t my taxes be paying for this?!” But with careful design, robust survey methods and an understanding of potential research biases, you can get remarkably useful insights into the non-market value of heritage.

Assessing the benefits of historic shopfront restoration

The High Streets Heritage Actions Zones programme  is a £95 million initiative (funded by Historic England, DCMS, MHCLG, Arts Council England, and the National Lottery Heritage Fund)  to revitalise historic high streets – think less “Poundland and vape shop” and more “heritage character and local pride”. One aspect of the programme is a focus on repairing historic shopfronts and buildings in 67 locations across England. My study aimed to put a “value” on the public wellbeing benefits of those improvements using a bespoke CV approach. This aligns with DCMS’s Cultural Heritage Capital programme, which promotes robust economic valuation to better capture the public value of cultural assets.

Why bespoke? Because the existing valuation evidence from other similar studies (helpful though it is) is often mismatched. Using the findings from a study of the wellbeing impacts of a visit to the Natural History Museum in London, for instance, probably isn’t appropriate if you’re trying to appraise the wellbeing benefits of a visit to the Framework Knitters Museum just outside Nottingham (no shade to the Framework Knitters – I’m local). In economics jargon, this would likely cause “benefits transfer error”.

So, I designed a study using online surveys at 12 high street locations across England, carefully chosen to reflect different levels of “heritage intensity” (the proportion of local buildings that are historically listed). I then collected responses from both users (people who had visited recently) and non-users, because the economic value of heritage goes well beyond those who physically engage with it.

How much for that lovely old shopfront?

The headline finding? People do value improvements to historic shopfronts and buildings, and they are willing to pay for them. The mean household-level willingness to pay was £19.31 for users and £8.60 for non-users.

Hang on a minute – what’s “willingness to pay”? It’s more economist-speak, I’m afraid. But put simply, it’s the maximum amount people would pay to contribute to the historic shopfront improvements in the absence of any other funding. A 19^th century shop frontage beats LED signage and cracked windows any day – surely?

As expected, users – those who actually stroll down the beneficiary high streets – felt a stronger connection and showed higher willingness to pay than non-users. Sociodemographic factors also played a role. Higher income? Higher willingness to pay. A long-term resident (10+ years) in the local area? Ditto. A member of a heritage organisation? Again, more likely to part with their cash. And yes, the proportion of heritage buildings – our “heritage intensity” metric – was positively linked to how much people valued the improvements, albeit this relationship was a weak one.

From shopfronts to spreadsheets: Making the case for investment

So what can we do with the results? For one thing, the willingness to pay values can be used in cost-benefit analysis, feeding into HMT Green Book-style appraisals. This was undertaken in AMION’s evaluation of the Historic England’s High Streets Heritage Action Zones programme. In addition, if another high street wants to secure funding for restoring its historic shopfronts, they could use my willingness to pay values to estimate the potential economic benefits – provided they adjust appropriately for local demographics and contextual differences. That last point matters. One of the biggest risks in using CV studies is the potential for benefit transfer error, hence why bespoke is always best.

The end of this restoration job

This blog barely scratches the surface of a project that took several months – and many long nights – to complete. However, I hope it gives a flavour of how CV can shine a light on the intangible benefits of heritage, and why bespoke studies matter so much when it comes to non-market valuation. If you’ve read this far, thank you. You can now return to your regularly scheduled programming – spreadsheets, site visits, reading more iED blogs or whatever else fills your professional day. And a final note of warning, I’m hoping to publish my research formally. If successful, brace yourselves for a further article. Exciting times, indeed.

Liam Cox is a Senior Consultant at AMION Consulting.

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