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Social and economic benefits from regional investment in arts facilities: Theory and application

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  1. The words “arts” and “culture” are used in this paper simply to delimit a range of activities including the creation and consumption of music, drama, painting, craft, poetry, dance and so on, so that an arts “focility” refers either to a single-purpose institution such as a library, theatre, museum, concert hall or gallery, or to a multipurpose venue allowing for both participatory and spectator activities, such as in a typical community arts centre.

  2. Perloff, H. S. et al., “The Arts in the Economic Life of the City,” (New York: American Council for the Arts, 1979); J. L. Shanahan, “The Arts and Urban Development,” in W. S. Hendon, et al., editors, Economic Policy for the Arts, (Cambridge, Mass.: Abt Books, 1980), pp. 295–305.

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  3. Cwi, D. and K. Lyall, Economic Impact of Arts and Cultural Institutions: A Model for Assessment and a Case-study in Baltimore, (Research Division Report No. 6, National Endowment for the Arts, Washington D.C., 1977).

  4. National Endowment for the Arts, Economic Impact of Arts and Cultural Institutions: Case Studies in Columbus, Minneapolis/St. Paul, St. Louis, Salt Lake City, San Antonio and Springfield, (Washington, D.C.: National Endowment for the Arts, for the Publishing Center for Cultural Resources, 1981).

  5. Impact studies might therefore be accused of “economo-centrism”, to use Ziolkowski's phrase (see J. A. Ziolkowski, “The Integrated Social Sciences Approach to Regional Planning in Developing Countries,” in A. Kulinski, editor, Social Issues in Regional Policy and Regional Planning, (The Hague: Mouton, 1977) p. 435) But they may be defended on the grounds that these economic effects have hitherto been only speculative and rigorous empirical effort is needed to pin them down in order to inform and stimulate debate on wider aspects of the arts' role in regional affairs.

  6. See, for example, J. A. Sinden and A. C. Worrell, Unpriced Values: Decisions without Market Prices, (New York: John Wiley, 1979). For specific details on the nonmarket effects of the performing arts, see C. D. Throsby and G. A. Withers, The Economics of the Performing Arts, (New York: St. Martin's Press, 1979) pp. 169–86.

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  7. See further, for example, in E. J. Mishan, “Welfare Validity of the demand for Recreation,” in G.A.C. Searle, editor, Recreational Economics and Analysis, (New York: Longmans, 1975), Ch. 4, and R W. Vickerman, The Economics of Leisure and Recreation, (London: Macmillan, 1975).

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  8. See further, for example, in P. Bohm, “Estimating access values,” in L. Wingo and A. Evans, editors, Public Economics and The Quality of Life, (Baltimore: Johns Hopkins, 1977), pp. 181–95, and “Estimating Willingness to Pay: Why and How?” Scandinavian Journal of Economics, Vol. 81, 1979, pp. 142–53.

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  9. See further in H. Armstrong and J. Taylor, Regional Economic Policy and Its Analysis (Oxford: Philip Allan, 1978), and G. D. McColl and C. D. Throsby, “Multiple-objective Benefit- Cost Analysis and Regional Development,” Economic Record, Vol. 48, 1972, pp. 201–19.

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  10. Throsby, C. D. and M. O'Shea, The Regional Economic Impact of the Mildura Arts Centre, (Research Paper No. 210, School of Economics and financial Studies, Macquarie University, Sydney, 1980).

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  11. All monetary quantities are expressed in Australian dollars at constant 1979 prices. In 1979, $AI = $US 1.12 approximately.

  12. A case where the social rate of return of project A exceeds that of B, but the regional impacts of B are greater, raises the well-rehearsed issue of the tradeoff between national efficiency and regional equity in public project selection: see, for example, M. C. McGuire and H. A. Garn, “The Integration of Equity and Efficiency Criteria in public Project Selection,” Economic Journal Vol. 79, 1969, pp. 882–93.

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  13. Shanahan, op cit.; D. Cwi, “Models of the Role of the Arts in Economic Development,” in Hendon, et al., op. cit., pp. 308–16.

  14. It needs to be remembered that cost-benefit analysis of this type assumes the project is small enough not to affect the pattern of prices at a national level, and takes the existing distribution of income as given.

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  1. Macquarie University, Sydney, Australia

    C. D. Throsby

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  1. C. D. Throsby
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This research was supported by a grant from the Australia Council. The research assistance of Margaret O'Shea is gratefully acknowledged.

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Throsby, C.D. Social and economic benefits from regional investment in arts facilities: Theory and application. J Cult Econ 6, 1–14 (1982). https://doi.org/10.1007/BF00162290

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