The Study
Questions & Answers about this Study


WHY UNDERTAKE AN ECONOMIC IMPACT STUDY OF ARTS & CULTURE?
Economic impact studies of arts and culture are a widely used advocacy tool in North American communities. They are designed to create public awareness of the economic value of arts and culture, and build support for private and public investments and policies that assist the growth of cultural organizations, institutions, and businesses.

In particular, this study is intended to demonstrate the economic value of arts and culture in the Central Okanagan by quantifying the direct impact and economic "ripple-effect" generated by cultural activity. In addition, the data contained in this study will create a baseline against which the future growth of the cultural economy can be measured.


HOW IS THE ECONOMIC IMPACT OF ARTS & CULTURE MEASURED?
In conducting this study, several indicators were used to determine the economic impact of arts and culture. These include operations costs and revenues in the cultural sectors, employment in the cultural sectors, and corresponding payrolls. In keeping with standard practice in economic impact studies, the economic impact of arts and culture (i.e., the cultural economy's total GDP¹) has been calculated by analyzing and totalling:

• Direct GDP impacts, which are the total expenditures on goods and services used in the production of cultural goods and services, including expenditures created within other supporting sectors through demand for goods and services originating from the cultural sectors.²
• Induced GDP impacts, which are personal expenditures on goods and services originating from wages and salaries paid in the production of cultural goods and services. Induced impacts are commonly referred to as spin.

In order to calculate induced impacts, an economic multiplier is used. Based on a literature review of other economic impact studies of arts and culture, a relatively conservative multiplier was selected for this study: 1.8.

To calculate the induced impact created, for example, by the visual arts sector, the sector's direct GDP impact of $1.9 million is multiplied by 1.8. The resulting figure, $3.4 million, is the sector's total GDP impact. The difference between the two figures, $1.5 million, is the sector's induced GDP impact.

WHO WAS SELECTED TO PARTICIPATE IN THIS STUDY?
Primary arts and cultural contributors were selected to participate. Primary contributors are defined as businesses, institutions, individuals and organizations that contribute directly to the production, facilitation, performance and servicing of arts and cultural activity within the regional economy.

It is recognized that, based on the above definition, movie theatres, bookstores, broadcasters, recorded music retailers, video rental outlets, etc., should also be included in this study. However, these contributors are excluded because they act largely as channels or conduits of arts and culture. Moreover, with few exceptions, the cultural products sold by these contributors are not produced within the Central Okanagan. They were defined, therefore, as secondary contributors.

Included in the definition of primary contributors are both non-profit organizations and for-profit businesses. When considering the for-profit category, the term primary contributor refers to those whose primary income is a direct result of their cultural activity.

In this respect, hobbyists were not considered to be primary contributors. Although it is recognized that hobbyists generate economic activity, expenditures by hobbyists are measured through the sales revenues of service and material providers (which are already captured in this study). At the same time, revenue produced by hobbyists is not classified as income.

Subject to the above qualifications, the scope of this study includes:

• Art Galleries & Dealers (Commercial Art Galleries, Art Dealers, Art Distributors and Publishers.)
• Arts Instruction & Education (Music, Drama and Art Teachers, MusicSchools, Dance and Acting Schools.)
• Commercial Arts (Commercial Artists, Graphic Designers, Photographers.)
• Performing Arts (Musicians, Musical Ensembles, Bands, Orchestras, Comedy Groups, Theatre Companies, Touring Entertainers.)
• Visual Arts (Painters, Sculptors, Ceramic Artists, Craftspersons.)
• Literary Arts (Creative Writers.)
• Events & Festivals (Coordinators, Administrators, Featured Performers.)
• Cultural Facilities (Public Art Galleries, Museums, Libraries, Theatre Venues.)
• Service & Material Providers (Artists' Suppliers, Picture Framers, Craft Retailers and Suppliers, Dance, Masquerade and Theatrical Suppliers, Musical Instrument Retailers, Audio/Video Service and Equipment Providers, Arts Consultants, Ticket Outlets, Live Music Venues.)
• Societies & Associations (Cultural Service Organizations, Recreational Arts Groups.)
  
  

HOW WERE THE PRIMARY CONTRIBUTORS IDENTIFIED FOR THIS STUDY?
A combination of approaches was used. These included:

• Establishing and classifying a list of primary contributors from the 1997 edition of Dominion Directories (Yellow Pages) listings;
• Contacting knowledgeable individuals and organizations to further expand and define the list;
• Adding other primary contributors through interviews with members of the already defined population group; and,
• Consulting with other local cultural observers to obtain qualitative information germane to understanding the dynamics within various sectors.
  
  

HOW WAS THE RESEARCH CONDUCTED?
The research was conducted in accordance with generally accepted research standards. It included developing an original survey to sample the cultural sectors and sub-sectors, interviewing key industry observers, and obtaining economic information from existing published sources.

It is recognized that, in attempting to establish the number of primary contributors within each cultural sector, the economic impact of some sectors may have been underestimated. However, caution was exercised to ensure that, within each sector, economic impacts have not been overestimated.


WHAT ARE THE GEOGRAPHIC BOUNDARIES OF THIS STUDY?
The geographic boundaries of this study (the boundaries of the Regional District of Central Okanagan) extend south to Peachland, and north to Lake Country, and include:

• The City of Kelowna
• The Municipality of Lake Country
• The Municipality of Peachland
• Subdivision A (Ellison, Joe Rich)
• Subdivision B (Westside)
  
  
  

¹ Direct GDP (Gross Domestic Product) is comprised of wages and salaries, supplementary labour income, corporate profits before taxes, miscellaneous investment income, unincorporated business income, inventory valuation adjustments and capital consumption allowances. In this study, induced GDP has also been calculated to determine the total economic impact of arts and culture (i.e., the cultural economy's total GDP).

² In economic impact studies of arts and culture conducted by Statistics Canada, the term "indirect impact" is used to describe expenditures (and jobs) created within other supporting sectors through demand for goods and services originating from the cultural sectors. In this study, expenditures and jobs created within other supporting sectors are treated as direct impacts.