Valuing damage to historic buildings using a contingent market: a case study of road traffic externalities

Pricing of road transport at social marginal cost should make users aware of the cost of damaging the environment (external costs). Such an approach, however, requires a monetary estimate of this damage which can be difficult to derive. On the basis of a study carried out at Neuchâtel (Switzerland), the contingent valuation method was used to estimate the damage caused to buildings of historical and cultural value by traffic‐caused air pollution. In a survey, individuals were asked to contribute to a fund set up to finance the maintenance of pre‐selected historic buildings. A valuation function to predict willingness‐to‐pay responses is estimated.