It is widely acknowledged that cultural facilities such as museums, art galleries, theatres and their related activities generate a number of social and cultural benefits to regional towns and cities such as community cohesion, sense of identity, health and improved educational outcomes.
And while these facilities often have a positive economic impact on the local economy (from the operations of the facilities, the capital expenditure related to the facilities and the non-local (tourist) visitation), valuing the social impacts presents a challenge, because it is often difficult to assign a market price to them.
The .id Solution
To capture the wider benefits of this project, our economics team undertook a cost-benefit analysis and economic impact analysis. Our analysis demonstrated that the benefits of the project were well above costs and would represent a significant return on investment for the government.
The following benefits and impacts were quantified in our analysis:
- Additional revenue for the Arts and Recreation sector
- Additional tourism visitation
- Induced tourism expenditure
- Community benefits (e.g. value of leisure, satisfaction, personal development and social interaction)
- Volunteering benefits
- Direct and indirect employment generated during the construction and operation phase (using the impact model developed specifically by NIEIR for the Clarence Valley economy).
Our CBA was undertaken in accordance with the guidelines prescribed by the Australian Government and NSW Government. The outputs from our work also directly responded to the economic criteria outlined in the grant applications guidelines (e.g. Net Present Value and Benefit Cost Ratio).
Demonstrating the Impact of Social Benefits
As part of this project, we undertook a literature review to help support our claims about the economic and social benefits of cultural facilities. This included:
By using both traditional market and non-market valuation techniques, we were able to develop a compelling case about the wider economic and social benefits of the proposed revitalisation of the Grafton Regional Gallery.
Further Information
Check out articles from our Economics team here, or feel free to book a meeting if you would like to learn more about how we can help you build the evidence base.
