A couple of weeks ago I posted about an economic impact assessment commissioned by the Virginia Museum of Fine Arts (VMFA). The report was produced by Chmura Economics and Analytics of Richmond into a Picasso exhibition run by the VMFA earlier this year. The report estimates the exhibition delivered benefits of $26.6m to Richmond, where the VMFA is based, and a further $3.4m to the rest of Virginia. These are seriously impressive numbers.
So, here are some thoughts about the report and the analysis it contains.
- Sample size – There were 230,373 visitors in total to the exhibition, although it isn’t clear how the VMFA calculated the figure (it’s likely to be based primarily on ticket sales). The Chmura analysis is heavily predicated on a survey they undertook showing that 94% of those attending the exhibition cite it as their primary reason for visiting Richmond. But this is based on a sample of just 404 visitors, or 0.176% of the population. This simply cannot be considered representative and renders speculative any conclusions drawn.
- Cost of the exhibition – Programmatic spend makes up around $4m of the total, but it is a weak measure of economic impact. You have to spend the money to put on the exhibition so even if no one visited or spent any money, there would be some sort of an economic impact. And the greater the cost of staging the exhibition, the greater the impact… The programme budget is an input – part of the cost of generating the outputs the analysis is trying to measure. The benefits to Richmond and Virginia will be greater if these costs can be minimised, since they free up resources to be spent elsewhere. Spend on employment is somewhat different, but it’s only really useful if jobs were created solely because the exhibition was on and for the period it ran. It’s also worth asking whether and where the fee for Chmura consultants’ services are included!
- Attribution – It’s not possible to say that there was a wider economic boost to the area as a result of the exhibition without ruling out any other possible revenue generating events at the same time in the same area. And even accepting that the primary reason for visiting was attendance at the exhibition doesn’t mean that all of the economic benefits of a visit can be attributed to the exhibition. The exhibition may simply have dictated the timing of a trip that would have happened anyway, or been the primary factor among several.
- Negative impact of the exhibition – This point is related to the second one, but any comprehensive assessment of the exhibition’s impact has to at least consider the possibility that there were negative effects. This might be reduced spend on the Richmond’s other amenities because residents bought tickets to the exhibition instead. Or the additional cost of cleaning up litter or mending the roads because of the number of visitors. Or take the comment, found deep in the appendix, that those whose primary reason for visiting Richmond was the exhibition spent less than those who had other motivations. It’s at least possible that the exhibition reduced the average amount visitors spent in the region.
- Negative fiscal impact – Another possibility is that tax income to the local and state governments was negatively affected. The VMFA does not charge an admission tax, but the analysis includes tax revenue from other venues where the attendees primary reason for visiting Richmond was the exhibition. Well, there is also likely to be lost tax revenue for those who attend the Picasso exhibition instead of alternative venues.
- Opportunity cost – The initial Art Law blog reported that a fee paid to the Musee National Picasso for loaning the exhibit. One imagines it was sizeable, and such a fee could have been spent in myriad ways. Without knowing what alternative courses of action were considered, and what relative benefits they might have delivered, the $30m benefit quoted lacks real context.
I don’t mean to sound overly critical as the report is no better or worse than similar pieces of analysis and there may be sensible responses to the issues highlighted above.
But the really disappointing thing is, I’m sure that the exhibition was a massive success & brought all kinds of benefits to the region and those lucky enough to see it. Certainly, I would have loved to visit, although I probably wouldn’t travel Virginia from the UK primarily for that purpose.
By attempting to do an analysis of this kind but not doing it comprehensively, the real value of the exhibition gets lost amid the noise.
(Thanks to Leila Davids for her input on some of the finer points)