Proceedings of Eurasia Business Research Conference
16 - 18 June 2014, Nippon Hotel, Istanbul, Turkey, ISBN: 978-1-922069-54-2
Do UNESCO Heritages Attract More Tourists?
Taek-Seon Roh, Sangmee Bak and Chung-ki Min1
It is believed that the inscription of World Heritage by UNESCO increases tourism
demand, leading to economic growth. This study examines 1) whether there is a
relation between the WHL and the leisure tourism, and 2) whether there is any
difference of the relationship depending on the type of heritage. Using panel data of
78 countries, we test the proposition with linear and non-linear econometric models.
Overall, both tangible and intangible heritage have significant positive effects on
tourism demand, while the contribution of intangible heritage is greater than the one of
tangible heritage.
JEL Classification: L83; O40
1. Introduction
Since the 1972 convention concerning the protection of the world cultural and
natural heritage, UNESCO has been inscribing certain places on Earth as World
Heritage to protect and keep their outstanding value. It has so far added 981 sites in
the World Heritage list (WHL) including 753 cultural, 193 natural, and 29 mixed
properties from over 158 countries. From 2001, UNESCO has also been inscribing
intangible cultural heritages. So far, 282 elements have been inscribed as intangible
cultural heritage and 35 as intangible cultural heritage in need of urgent safeguarding.
UNESCO speaks highly of goodwill, focusing on the role of culture of which
heritages, tangible or intangible, are very essential part. “Heritage constitutes a
source of identity and cohesion for communities disrupted by bewildering change
and economic instability.”2 However, for the country which has such heritage, this is
not the end of story. As a supplier of cultural heritage, there must be any kind of
incentive for the country to keep up with UNESCO’s strict and fastidious regulation
on the enlisted heritage. Nowadays, as every country tries hard to get enlisted, it
becomes more and more competitive to be on the list. It is not difficult to infer that
such a high competitiveness comes from economic benefits of the WHL. From an
economic point of view, it is believed that the inscription by UNESCO increases
tourism demand, leading to economic growth.
However, although it has been over 40 years in history and the number of
enlisted sites reaches one thousand, researches on the economic effects of the WHL
can only be counted on fingers. Other than some books and articles on the
economics of cultural heritage published around the end of 1990s, there is almost no
systematic research on the relationship of the WHL with tourism, and eventually with
economic growth, which employs rigorous econometric methods.
1
Email address: tsroh@hufs.ac.kr (ROH), sangmbak@hufs.ac.kr (BAK), and cmin@hufs.ac.kr (MIN).
This work was supported by the Hankuk University of Foreign Studies Research Fund. Seoul, Korea.
2
http://en.unesco.org/themes/protecting-our-heritage-and-fostering-creativity
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Proceedings of Eurasia Business Research Conference
16 - 18 June 2014, Nippon Hotel, Istanbul, Turkey, ISBN: 978-1-922069-54-2
Arezki et. al. (2009) investigate whether tourism specialization is a viable
strategy for economic development, using the WHL as an instrumental variable for
tourism specialization. They find a positive relation between the extent of tourism
specialization and economic growth. Yang et. al. (2010) examine the relationship
between the WHL and the number of tourists by using China provincial panel data
from 2000 to 2005 and find that the WHL has a significant tourist-enhancing effect.
Cellini (2011) makes some critical comments on both Arezki et. al. (2009) and Yang
et. al. (2010). Su and Lin (2014) examine the impact of the WHL on inbound tourism
using panel data for 66 countries from 2006 to 2009. They also find a positive
relation between the WHL and the number of international tourists.
However, there are some conceptual and econometric issues in the previous
studies; this drives us to conduct this research. First, we disentangle the effect of
leisure tourism from the one of business tourism. In our earlier research, we
categorize tourism demand into two components, leisure tourism and business
tourism. Leisure tourism, which includes tourism for heritage sites, is clearly different
from business tourism in many aspects, such as travel purpose, duration,
expenditure, etc. Most importantly, leisure tourism can be a factor for economic
growth, but business tourism is more likely to be a result of economic growth.
Therefore, if one examines the economic effect of the WHL, the effect of business
tourism has to be netted out.
Another important conceptual problem is related to the type of heritage. As
noted earlier, UNESCO world heritage has two types; tangible and intangible.
Tangible heritage includes cultural sites and nature, simply noted as World Heritage
by UNESCO. Intangible heritage "refers to the practices, representations,
expressions, knowledge and skills transmitted by communities from generation to
generation,"3 noted as Intangible Cultural Heritage.
Though the conceptual difference between these two types of heritage is self
explanatory by their names, it is more complicated to examine the difference in their
economic implications. In the economic context of the supply and demand of cultural
heritage, there is an asymmetry of information on a specific heritage between
supplier and demander. As a supplier of tourism resources, the country who has
certain heritage, tangible or intangible, would insist that it is much worth watching.
But, international tourists obtain information about the heritage only from some
brochures or web-surfing and thus do not have enough information. In a situation like
this, UNESCO's inscription of heritage could play an important role to solve the
problem of asymmetric information by 'signaling' that it is really worth watching.
However, the point is that signaling effects by the inscription are not the same
between the two types of heritage, because the information gap is much bigger in
intangible heritages than tangible ones. This information gap comes mostly from the
characteristics of the heritages that, while one can see and touch tangible heritages,
it is much harder to find value and attractiveness of intangible heritage. Therefore,
once inscribed, intangible heritages are expected to have bigger signaling effects,
leading to calling in more tourists marginally than tangible ones.
In this study, we examine 1) whether there is a relation between the WHL and
the leisure tourism, and 2) whether there is any difference of the relationship
3
http://en.unesco.org/themes/intangible-cultural-heritage
2
Proceedings of Eurasia Business Research Conference
16 - 18 June 2014, Nippon Hotel, Istanbul, Turkey, ISBN: 978-1-922069-54-2
depending on the type of heritage.
Trend of WHS and Arrivals
1.2
1
100
0.8
50
0.6
0
0.4
WHS
# of Arrivals(billion)
# of WHS
150
ARRIVALS
2. Models
To examine the effects of having heritages on the UNESCO list, this study
employs log-linear models.
log ARRIVALS it   0   1 TGBit   2 inTGBit   3 log GDPit   4 log PPPit
  5 log POPit   6 log TRADEit   7 HEALTHit
(1)
  8 URBANit  10 SCHOOLit  (Year dummies)  ut
where log ARRIVALSit is the (logarithmic) number of international arrivals in country
i during year t, which is used as a measure of tourism demand. As an alternative
measure of tourism demand, we also use the logarithmic tourism receipts
( log RECEIPTSit ) expressed in the 2005 constant US$. TGBit and inTGBit are the
number of tangibles and intangibles on UNESCO Heritage List, respectively. GDPit
is the gross domestic product measured in the 2005 constant US$.
To account for travel costs, we include a purchasing power parity index. The
purchasing power parity conversion factor (CF) is the number of units of a country’s
currency required to buy the same amounts of goods and services in the domestic
market as US dollar would buy in the US. Since this conversion factor is expressed
in local currency units, it cannot be compared between countries. To make this
conversion factor suitable for cross-country comparison, we construct an index
(denoted by PPP) using year 2005 as a base year, that is, PPPit  CFit / CFi , 2005 for
each country i. An increase in PPPit indicates that traveling country i becomes more
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Proceedings of Eurasia Business Research Conference
16 - 18 June 2014, Nippon Hotel, Istanbul, Turkey, ISBN: 978-1-922069-54-2
expensive in year t.
For cross-country analysis, it is important to control for the size of countries.
One way of standardizing the dependent variable is to express the tourism demand
per capita; for example, the number of international tourist arrivals is divided by the
population size, ARRIVALS / POP . Since the dependent variable is expressed as a
logarithmic value, this per capita quantity of the dependent variable is equivalent to
using the logarithmic arrivals as the dependent variable and the logarithmic
population size as an explanatory variable;
log( ARRIVALS / POP)   0  ...  u
becomes log ARRIVALS   0  log POP  ...  u . That is, we can control for country
size by including log POPit as an explanatory variable.
International tourism can be decomposed into two broad categories, leisure
and business tourism. This study defines that the principal purpose of leisure tourists
is to share and enjoy the physical and intangible culture, including landscapes, arts,
tradition and language. Thus, leisure tourism includes not only leisure and naturebased tourists, but also culturally-motivated and heritage-related tourists. In fact, it is
not easy to separate the different types of tourists from each other, because holiday
destinations often emerge from balancing a number of goals and criteria which are
leisure-, nature-, culture- and/or heritage-related (Bellini et al., 2007). In contrast, the
purpose of business tourism is primarily for public and business arrangements and
therefore, its destinations are more likely to be areas developed for business
purposes, such as cities and industrial regions. Historically, business tourism, in the
form of traveling to, spending money and staying abroad for some time, has a history
as long as that of international trade (Wikipedia: Business tourism). Since this study
focuses on leisure tourism, we net out the effects of business tourism by including
the (logarithmic) trade volume, log TRADEit , which does not include tourism receipts
(Arezke et al., 2009).4
The other control variables used are: HEALTHit = percentage of health
expenditure in GDP, URBANit = percentage of urban population, and SCHOOLit =
ratio of total enrollment, regardless of age, to the population of the age group that
officially corresponds to the level of tertiary education.
4
Yang et al. (2010) use the inflow of foreign capital to control for the business tourism.
4
Proceedings of Eurasia Business Research Conference
16 - 18 June 2014, Nippon Hotel, Istanbul, Turkey, ISBN: 978-1-922069-54-2
3. Data and Empirical Results
The annual data for the 1995-2012 periods are collected from World
Development Indicators, World Bank. A total of 78 countries are included in the
dataset.
Table 1 reports the estimation results when the tourism demand is regressed
on the number of tangible and intangible heritages on the UNESCO list. In the first
three regressions, (i)~(iii), the tourism demand is measured by the number of
international tourist arrivals in each country. Since both tangibles and intangibles
have significant positive effects on the tourist arrivals, regression (iii) is more
appropriate for our drawing a conclusion. When the number of tangible heritage
increases by one, the tourist arrivals are expected to increase by 2.9%. The
intangible heritage has a bigger impact: the tourist arrivals are expected to increase
by 5.7% for an additional intangible heritage. This greater impact of intangible
heritage is probably due to a reduction of information asymmetry by the inscription
on UNESCO Intangible Heritage List. The extent of information asymmetry is higher
in intangible assets than tangible ones because intangibles are country-specific,
culture-related and not visible. Thanks to the inscription on UNESCO Intangible
Heritage List, the value of intangible heritage is guaranteed and, as a result, the
information asymmetry associated with them can be much reduced.
[TABLE 1 ABOUT HERE]
In the last three regressions (iv)~(vi) in Table 1, the tourism demand is
measured by the tourism receipts expressed in the 2005 constant US$. According to
regression (vi) which includes both tangibles and intangibles, the tourism receipts
are expected to increase by 2.5% for an additional tangible and by 4.9% for an
additional intangible heritage. The impact of intangible heritage is twice as big as the
one of tangible.
The number of tangible heritages on the UNESCO list is ranged up to 46
while the number of intangible ones is up to 13. The contribution of the heritage
inscription to tourism might not be linear, particularly for tangible heritage because
the marginal contribution is not likely to be constant for a wide range up to 46
tangible heritages. To allow for possible diminishing contribution of tangible heritage,
we include quadratic terms (TGB2) of the number of tangible heritages on the
UNESCO list.
[TABLE 2 ABOUT HERE]
Table 2 shows that for tangible heritage, the quadratic term is highly
significant with a negative coefficient estimate of -0.001, indicating a diminishing
effect of tangible heritage. For intangible heritage, however, the quadratic term is
insignificant and thus not included in regressions (iii) and (vi). The estimates in
regression (iii) indicate that the marginal effect of tangible heritage (TGB) on the
tourism arrivals decreases from 7.0% (when TGB=0) to 2.4% (when TGB=46), while
the one of intagible heritage (inTGB) is constant at 6.3%. Regression (vi) shows that
the marginal effect of TGB on the tourism receipts also decreases from 7.7% (when
TGB=0) to 3.1% (when TGB=46), while the one of inTGB is constant at 5.8%.
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Proceedings of Eurasia Business Research Conference
16 - 18 June 2014, Nippon Hotel, Istanbul, Turkey, ISBN: 978-1-922069-54-2
Overall, both tangible and intangible heritage have significant positive effects on
increasing tourism demand, while the contribution of intangible heritage is greater
than the one of tangible heritage.
4. Conclusion
In this study, we have examined whether there is a relation between the WHL
and tourism demand, and whether there is any difference of relationship depending
on the type of heritage. The empirical findings reveal that both tangible and
intangible heritage have significant positive effects on tourism demand, and that the
contribution of intangible heritage is greater than the one of tangible heritage. This
implies that UNESCO's inscription of intangible cultural heritage has a significant
signaling effect on the tourism demand.
References
Arezki, R., Cherif, R., & Piotrowski, J. (2009), Tourism specialization and economic
development: Evidence from the UNESCO World Heritage List. IMF working
paper 09/176
Bartel, A.P. and Sicherman, N. (1999), Technology change and wages: an
interindustry analysis, Journal of Political Economy 107(2), pp. 285-325.
Bellini, E., Gasparino, U., Corpo, B.D., & Malizia, W. (2007). Impact of cultural
tourism upon urban economies: An econometric exercise. Fondazione Eni Enrico
Mattei Working Paper Series, No. 85, http://www.ssrn.com/link/feem.html.
Bushee, B.J. (1998), The influence of institutional investors on myopic R&D
investment behavior, The Accounting Review, 73, pp. 305-333.
Cellini, R. (2011), Is UNESCO recognition effective in fostering tourism? A comment
on Yang, Lin and Han, Tourism Management 32, pp. 452-454.
Hausman, J.A. and Taylor, W.E. (1981), Panel data and unobservable individual
effects, Econometrica 49(6), pp. 1377-1398.
Su, Y. W., & Lin, H. L. (2014), Analysis of international tourist arrivals worldwide: The
role of world heritage sites, Tourism Management 40, pp. 46-58.
Yang, C. H., Lin, H. L., & Han, C. C. (2010), Analysis of international tourist arrivals
in China: The role of World Heritage site, Tourism Management 31, pp. 827-837.
Yang, C.H., Lin, H.Y. (2014), Revisiting the relationship between World Heritage
Sites and tourism, Tourism Economics 20(1), pp. 73-86.
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Proceedings of Eurasia Business Research Conference
16 - 18 June 2014, Nippon Hotel, Istanbul, Turkey, ISBN: 978-1-922069-54-2
Table 1: Regression results of tourism demand on tangible and intangible heritages
Dep. var = log(ARRIVALS)
Dep. var = log(RECEIPTS)
Variable
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Intercept
-1.225**
TGB
0.034***
inTGB
-4.856***
-2.767***
1.925***
0.029***
0.030***
0.088***
0.057***
-0.700
1.104**
0.025***
0.075***
0.049***
log(GDP)
-0.307***
0.056
-0.119
0.508***
0.778***
0.632***
log(PPP)
-0.009
-0.001
0.019
0.104*
0.108*
0.122*
log(POP)
0.008
0.059
0.040
-0.360***
-0.371***
-0.387***
0.957***
0.709***
0.810***
0.527***
0.377***
0.458***
HEALTH
0.018
0.028**
0.006
-0.000
0.005
-0.014
URBAN
-0.010***
-0.014***
-0.012***
0.019***
-0.022***
-0.021***
SCHOOL
0.004***
0.009***
0.008***
0.005***
0.006***
0.005***
Year dummies
Included
Included
Included
Included
Included
Included
78.8
78.7
79.7
83.5
81.7
82.2
1272
1164
1164
1335
1227
1227
78
72
72
78
72
72
log(TRADE)
R2 (%)
No. of
observations
No. of countries
***, ** and * indicate that its coefficient is significantly different from zero at the 1%, 5% and 10%
levels, respectively.
7
Proceedings of Eurasia Business Research Conference
16 - 18 June 2014, Nippon Hotel, Istanbul, Turkey, ISBN: 978-1-922069-54-2
Table 2: Regression results of tourism demand on tangible and intangible heritages, including
quadratic terms
Dep. var = log(Arrivals)
Dep. var = log(Receipts)
Variable
(i)
(ii)
(iii)
(iv)
(v)
(vi)
Intercept
-0.612
-4.807***
-2.019***
2.949***
-0.716
2.059***
TGB
0.067***
0.070***
0.085***
0.077***
TGB2
-0.001***
-0.001***
-0.001***
-0.001***
inTGB
0.152***
inTGB2
-0.008
0.063***
0.054
0.058***
0.003
log(GDP)
-0.371***
0.072
-0.183**
0.409***
0.773***
0.558***
log(PPP)
-0.013
-0.014
0.011
0.095
0.112*
0.110*
log(POP)
0.003
0.050
0.032
-0.368***
-0.368***
-0.396***
0.996***
0.701***
0.844***
0.583***
0.380***
0.494***
HEALTH
0.019
0.029**
0.008
0.001
0.004
-0.012
URBAN
-0.009***
-0.014***
-0.012***
-0.019***
-0.022***
-0.020***
SCHOOL
0.004***
0.009***
0.007***
0.005***
0.006***
0.005***
Year dummies
Included
Included
Included
Included
Included
Included
79.0
78.7
80.0
84.0
81.7
82.7
1272
1164
1164
1335
1227
1227
78
72
72
78
72
72
log(TRADE)
R2 (%)
No. of
observations
No. of countries
8