Whilst there are many concerns regarding the validity of economic impact analysis as a means of valuing cultural festivals, there have also been some notable benefits highlighted in the literature (for example, Lind and Gronstad, 2010, and Bowitz and Ibenholt, 2009). Seaman (2003:8) pointed out six commonly made errors in economic impact studies, but then immediately highlighted important examples of studies which he felt successfully avoided each of these problems to still produce valid and reliable outcomes. This seems to call for researchers conducting a study to be aware of, and cautious not to commit these common errors, rather than for the method itself to be done away with as a way of valuing cultural events. Bowitz and Ibenholt (2009:7) expanded further by stating that political decision-makers and private firms still require the use of economic impact studies of cultural projects, and highlighted the importance of:
“a) accounting for all effects, both positive and negative;
b) comparing the effects of alternative government projects; and
c) specifying explicitly how the public expenditures on the cultural project under consideration, are financed.”
Although it could be argued that evaluating the arts industry according to its financial contribution to society would damage the “artistic impulse” itself, Cohen and Pate (2000:105) maintained that an approach to the arts which found outside valuation to be inappropriate did not recognise that many artists benefit both culturally and financially from outside support (like that from the government or from private sponsors). Pick‟s (1987:67, in Cohen and Pate, 2000:106) notion that the arts and culture (and indeed how the arts are to be treated and what resources should be allocated to it) have become so intertwined with politics, means that economic impact analyses are vital to the very survival of cultural festivals. Without a method which is able to attach value in the way that economic impact studies are, the artists‟ best interests would not be served, as the arts industry could well become less favoured than a more easily „measurable‟ one.
This notion also applies to the interests of those promoting conservation; with increased ability to measure benefits, generally there is a greater understanding amongst decision-makers of the benefits themselves, resulting in a decreased likelihood of unmeasured benefits being ignored.
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Further to this point, more recently it has been put forward that in fact the artists involved in festivals have the most to gain from economic impact studies conducted on them – and this goes beyond giving a festival a greater „relative importance‟ than an alternative event. As outlined by Lind and Gronstad (2010:8), research has shown that whilst festival organisers acknowledged a need to know their economic impact, there was an equal need to evaluate “their own event in terms of management and quality and audience satisfaction”, and that organisers required analysis on “the wider impact of the festivals in their local community”. Thus, there seems to be an „internal‟, as well as an „external‟ need for economic impact studies – with the internal allowing, arguably, even greater direct benefit to the arts, as festivals are provided with tools adapt to the wants of society, and thereby to sustain their existence altogether.
Similarly, Heaney and Heaney (2003:263), in completing an economic impact study based on a US music institute, arrived at the conclusion that the method can be used “strategically by arts management to provide information pertaining to the making and justifying of effective managerial and marketing decisions”. Quite simply, this indicates that in spite of the criticisms aimed at economic impact studies in terms of occasionally being unable to fully account for the value of a cultural event, they still contribute to the status and reputation of the event, which can be useful in the lobbying for government and even private funding (Snowball, 2008:36). This point falls in line with the view of Goldman et al. (1997:48), who acknowledge the criticism that economic impact studies are susceptible to political manipulation, but suggest that studies of this nature can also be used after-the-fact as a tool to better understand the implications of political decisions and in order to improve the efficiency of future decisions.
Heaney and Heaney (2003:263) explain that the method is able, amongst other things, to identify the most essential variables which relate to customer decision-making and satisfaction, to find out what other activities are supported by festival participants, and to increase the stature of an arts event within a community. Economic impact studies are also able to specifically identify ways in which funding should be spent to improve an event, by possibly upgrading those activities on which the visitors are shown to spend the most (Snowball, 2008:36), or even including activities which are absent altogether. It can thus be said that, if it is accepted that economic impact analysis is only a partial measure of the full worth of a cultural event (with
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certain intrinsic benefits undoubtedly being overlooked on occasion), there is still benefit to be drawn from the method and the resulting comparisons which can be made between festivals of a similar nature.
Getz (2008:403) notes that it was only a few decades ago that event tourism became established in the research community, and goes on to describe the growth in the sector over this period as
„spectacular‟ – a claim supported by Navarro et al. (2010:1) and Bardsen (2010:4). Mermiri (2010:3) has noted that even in the current economic downturn, recent analysis has revealed that in the UK cultural sector, attendances have increased by 12%. Dwyer et al. (2005:351) also made reference to the growth in the number of events in recent times, and suggested that in fact governments and municipalities now seek to attract them as they are perceived as leading to
„increased economic activity‟, „creating new jobs‟, and „facilitating business networking‟. Within the arts sector itself, this demand for festivals, and resultant heightened level of competition which has occurred over time, has meant that each festival is left to fight for its right to take place and to attract the amount of funding necessary for its continued existence. Importantly, Dwyer et al. (2005:351) saw much of the public justification for the funding of such events as revolving around the expected economic benefits. Without a tool capable of determining positive economic impacts on a host community, events such as cultural festivals would face a significantly more difficult task in merely surviving from one year to the next.
Crompton (2006:67), in pointing out the „mischievous‟ procedures which are sometimes used in economic impact studies to inflate figures for the benefit of the sponsors, makes specific mention that the method should not be disregarded conceptually as a result of this occasional misuse.
Economic impact studies are said to be theoretically sound and have a legitimate political role - to inform local authorities and taxpaying members of the public how much a certain event has contributed to the prosperity of local residents - but the legitimacy is based upon the studies being conducted in an honest manner. Bowitz and Ibenholt (2009:5) acknowledge that whilst some studies have produced large impacts and thus attracted a fair amount of strong criticism on methodological grounds, “badly performed and presented studies of economic impacts of art and cultural heritage should not be used as arguments against well performed ones”.
25 In the opinion of Seaman (2003:10):
“The policy interpretation error is primarily committed by sponsors of such studies and other arts advocates, despite warnings by economists, and this error is not limited to EIM studies, but is also equally common in CVM and other methodologies.”
Thus, it is suggested that economic impact studies should be viewed as being as conceptually reliable as other forms of economic valuation – arguably, all methods of valuation are equally susceptible to political interference and misinterpretation.
Tyrrell and Johnston (2006:3) list the benefits of economic impact studies, which they believe include being able to “estimate changes in regional spending, output, income, and/or employment associated with tourist policy, events, facilities, or destinations”. Economic impact studies are also useful for travel and tourism policy, even though the method was only designed to identify those options which may increase observable economic activity (Tyrrell and Johnston, 2006:3). The economic impact approach allows for the comparison of two scenarios, the status quo and a hypothetical situation. Therefore, it is possible to determine the benefits associated with a specific festival, compared to the hypothetical situation in which the festival did not exist at all – a classic example of opportunity costs. This can be extended to the mindset of potential visitors to an event. McKercher et al. (2006:57) suggest that visiting a festival involves some form of assessment of the benefits to be had from participation, and potential visitors must decide whether or not to trade-off one event for another which is assumed to give a greater benefit. If the alternative event is seen to be more worth-while, then that is the activity in which the tourist will engage.
Liu (2005:5) makes perhaps the simplest but most important point of all, in support of some form of economic valuation of the arts. It is widely understood that most (if not all) goods are valued in an economic, or financial, sense as this is a simple way of comparing goods on a common ground and on a worldwide scale. Liu (2005:5) is of the opinion that if traditional culture is not afforded the opportunity to fight for its existence on an economic level, then it will not survive in this “modern, fast-changing, and trend-dominated world”. Langen and Garcia (2009:9) support
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the argument that the fight for existence is fought on economic grounds, regardless of the notion that “environmental, socio-cultural, and political effects are probably more important”.
Economic impact studies, while admittedly imperfect, allow cultural festivals, at the very least, to be compared amongst themselves and if needs be (as is increasingly the case), to events or goods of a different nature altogether.