A well-developed methodology allows measurement of both direct market effects and the non-market ones. This makes it possible to measure and evaluate both events and projects whose purpose is to achieve a high market value and those aspiring to achieve high aesthetic value.
Assessment of economic impacts in the cultural sphere is subject to a limited number of studies, mainly aimed at mapping the cultural and creative industries. There is a lack of a clear focus on the analysis of the economic impact of cultural events, especially those that do not have well defined market nature.
The results of a study of the economic effects are of great help for the cultural operators and managers in carrying out analysis and assessment of past events, as well as for planning future ones. One such study would assist event organizers in the cultural sphere in identifying best practices and strategies for assessing and dealing with risk.
The results of the study of the economic effects are beneficial for partners and sponsors from the public and private sector that support or could support events or sites in the field of culture.
By examining the economic effects, we can trace the impact of an event or project on a wider range of people outside the specific target audience. With some adjustments, such methodology can be used to measure the social return on investment and to carry out an analysis of social benefits.
For this purpose in 2015 Bauersachs Foundation in partnership with Industry Watch developed a specific methodology, that measures the return on investment of cultural festivals. The methodology also allows quantification of the direct and indirect effects of a non-profit event.
Subject to pilot testing were the general economic effects of Festival Night / Plovdiv 2015. The results of the cost-benefit analysis shows that for every BGN invested in conducting Night / Plovdiv 2015, revenues to the local economy amount to 4 BNG. The marginal income, which is the result of 42 000 visits made by 31 000 unique visitors within two festival nights, amounted to 783,000 BGN.
By using the Travel Cost Method, we made a conservative estimate of the “willingness to pay” of the visitors, which is in the region of 204 000 BGN.
The optimistic scenario, based on the Contingent Valuation Method, shows “willingness to pay” up to 589,000 BGN.
The thus developed methodology is applicable not only for cultural festivals and sites, but also for a wider range of events and activities that have no direct economic impact. Among them are such activities as sport events, urban environment interventions and events and social projects of NGOs.
Short version of the report can be found here (in BG and EN)
If you wish to learn more about the existing methodology and its applicability to other events or objects in the cultural field, please write to email@example.com