Regional Economic Impacts of Large Cultural Events

1. Regional Economic Impacts of Large Cultural Events Does public funding of large cultural events make sense from a regional economic point of view? Peter Schmidt Astrid Kurzeja-Christinck, Jutta SchmidtAldona Kucarczuk Paper to be presented at UNCW / CSB 04/15/08 markt . forschung . kultur research team @

2. Research Questions • Business / Economics  ?  Art • Contradiction or Complements? • “Art – what’s the Economists point of view?” • Is an estimation of regional economic impacts possible? • Does public funding of large exhibitions make sense from fiscal point of view?

3. Outline 1. Arts and Economics 2. The Visitors – describing the target group 2.1 Socio-demographic characteristics 2.2 Origin of the visitors 2.3 Motives, Activities and Overnight Stays of Out-of- Town Visitors 3. Regional Economic Impacts 3.1 Expenditures of Out-of-Town Visitors 3.2 Regional Value Added: Direct and Indirect Impacts, Regional Multiplier 3.3 Fiscal Impacts 3.4 Additional effects:

4. 7 Surveys in 8 Years

5. 2. Visitors Profile (Van Gogh)- describing the target group • Average age of the visitors: ~ 46 • 61% of the visitors were women • 48 % completed a university degree • 77% of the visitors from other regions came because of the exhibition • For 75% the cultural experience was the most important motive for the visit

6. Who are the Visitors? aging population(?)

7. 2.2 Origin of the Visitorsvan Gogh 1 dot = 1respondent Bremen Neighborhood up to 250 250 +

8. Origin of the VisitorsPaula in Paris

9. Origin of the Visitors Van Gogh Blauer Reiter 145,500 52,000 43,000 27,000 50,500 47,500 24,000 41,969 12,000 3,000 Abroad Neighbour-hood Neighbour-hood Abroad

10. Out-of-town Visitors and Reason to visit Bremen

11. 2.3 Further activities of out-of-town visitors

12. Type of Accommodation of out-of-town visitors Duration of stay - out-of-town visitors

13. 3. Regional Economic Impacts of the Exhibitions Step 3: Fiscal Implications „Return on Investment for the city / region Step 1: Expeditures induced by the exhibition („new money“) Step 2: Regional Value Added viaindirect effects

14. 3.1 Estimation of the Expenditures of Out-of-Town Visitors 1

15. Estimation of the Expenditures of Out-of-Town Visitors 2

16. Estimation of the Expenditures of Out-of-Town Visitors 3different exhibitions: Events vs. permanent Exhibitions

17. 3.2 Regional Value Added Multiplier(1 + k) = 1.4

18. Regional Value Added: different Multipliers

19. 3.3 Fiscal EffectsPreliminary Estimate of Possible Tax Revenues

20. 3.4 Additional Effects • Local Expenditures • Import substitution • Non-Monetary aspects • Education, creative potential • Image + Identification • Successful exhibition – successful city • Nationwide (international) reports in different media • Application “European Cultural Capital” supported • Future Exhibitions • Confidence of partner institutions • New building / public + private funding

21. What did we learn ? • Arts& Economics • Complementary effects ! • The economists viewpoint: • Regional economic impacts: • Additional expenditures -> Value added • Public revenue • Positive image effect • Public funding of (cultural) events can make sense !

22. Thank you for your attention ! • Questions • Comments • Further aspects • Economic theory • Employment • Input / output ... • … Is it real …?