The Economic Impact of the Arts in California: A Policy Perspective
Waskin, Leon S.
MetadataShow full item record
This paper's original goal was to develop a means of measuring numerically the economic impact of the arts in California. Earlier economic impact studies reached their conclusions by applying multiplier values to arts-related expenditures in an attempt to estimate the direct and indirect effects of those expenditures. The author had hoped that these studies could be modified for use in California. However, upon closer examination, he concluded that any investigation based only on multiplier analysis would be inadequate. It would reveal little about where and how the arts impact the economy, and it would tend to overestimate the proportionate importance of the arts. Accordingly, rather than relying on multiplier-based analysis alone, the author initiated a two-fold investigation of the economic importance of the arts, one that combines the modified multiplier-based procedures with examinations of the economic health of areas currently using the arts as an economic development tool. In following this approach, Chapter I outlines two methods that California could use to conduct multiplier-based economic impact studies. One involves the modification of a model designed at Johns Hopkins University specifically for the arts. The other uses an existing California input-output model to estimate the effect of arts purchases on specific items throughout the state's economy. Chapter II suggests various measures by which the state might assess the argument of UCLA Professor Harvey S. Perloff that the arts, by enhancing an area's physical attractiveness, can also enhance its economic appeal by drawing in people, businesses, and jobs. The paper looks at specific attempts by communities in and out of California to use the arts in such a manner and concludes that, while indications thus far are mixed, in some areas public expenditures on the arts appear to have coincided with rapid economic growth--for example, in Cleveland, Seattle, Carmel-by-the-Sea, and Old Sacramento. Because correlation does not imply causation, the paper describes six procedures that California might employ to ascertain the extent to which the arts actually contributed to economic growth in these instances and the extent to which they might do so in the future. These procedures include: a survey of the previous employment of arts workers, to determine the arts' contribution to employment; a survey of visitors, to determine the arts' contribution to tourism; a survey of businesses, to determine the extent to which the arts attract investment; and a survey of property values in areas adjacent to arts activities, to determine the arts' contribution to those values. By combining a multiplier-based approach with these assessments of economic health, California might achieve the comprehensive analysis of the economic impact of the arts that has eluded other investigators. Yet whatever conclusions are thereby reached about the current economic impact of the arts, their potential remains untapped, for no attempt has been made to use the arts as an economic development tool on a scale so large as that envisioned by Perloff and his colleagues. If the arts are to be used to stimulate the economy, policies must be designed that explicitly foster that end. Accordingly, Chapter III outlines ways in which California might attempt to harness the economic power of the arts, including art in public buildings and parks, creating joint "live-work" zones for artists, integrating arts and artists with historical redevelopment projects, providing challenge grants to arts institutions, creating a statewide Audience Development Fund, and (most importantly) promoting California as an artistic and cultural center. Whichever form a California study ultimately assumes,it must be objective, skeptical, and comprehensive: objective, in the sense of not being predisposed to assume that the arts do or do not have a favorable economic impact; skeptical, in the sense of observing high standards of proof for any hypothesis; and comprehensive, in the sense of attempting to determine as precisely as possible which sectors of the economy are affected by the arts and how they are affected. Only through applying such exacting criteria will a truly informative estimate of the economic contribution of the arts be obtained.If you are not a current K College student, faculty, or staff member, email email@example.com to request access to this SIP.