The Economic Impact of the Arts in Watauga County, North Carolina
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- May 2003 Acknowledgements
- The Economic Impact of the Arts in Watauga County: Executive Summary Purpose of the Study
- SECTION I THE ECONOMIC IMPACT OF THE ARTS IN WATAUGA COUNTY: ARTS PATRON RESPONSES June 2002 - May 2003
- Survey Instrument and Procedure
- Comparison of Appalachian and Non-Appalachian Patrons
- Arts Patron Demographics
- Arts Patron Knowledge and Experience with the Arts
- Economic Impact of Arts Patrons in Watauga County
The Economic Impact of the Arts in Watauga County, North Carolina by
Associate Professor, Department of Marketing John A. Walker College of Business Appalachian State University Boone, NC 28608 stoddardje@appstate.edu Dr. Dinesh Davé Professor, Information Technology & Operations Management John A. Walker College of Business Appalachian State University Boone, NC 28608
Assistant Professor, Department of Economics John A. Walker College of Business Appalachian State University Boone, NC 28608
Introduction 8 SECTION I: ARTS PATRONS 10 Responses from the Arts Patrons 11 Survey Instrument and Procedure 11 Comparison of Appalachian and Non-Appalachian Patrons 11 Arts Patron Demographics 12 Location 12 Areas of Dominant Influence 13 Gender & Socioeconomics 13 Arts Patron Knowledge and Experience with the Arts 14 Economic Impact of Arts Patrons in Watauga County 15 Arts Patronage Impact 15 Arts Patrons Visitors Additional Spending 16 Total Economic Impact of Arts Patrons 16 Arts Patrons Tables 18 Arts Patrons Figures 43 SECTION II: ARTISTS 47 Responses from Watauga County Artists 48 Survey Instrument and Procedure 48 Demographic Characteristics of Artists and Arts Organizations 48 Economic Impact of Artist and Arts Organizations in Watauga County 49 Sales Revenue 49 Employee Payroll Expenses 50 Sub-Contracting Expenses 50 Total Economic Impact of Artists & Arts Organizations 50
SECTION III: RESIDENTS 57 Watauga County Preferences and Values for the Arts 58
Direct and Indirect Benefits 58 Methodology 58
Interest and Familiarity 60 Participation 60 Behavior 61 Watauga County Residents’ Values for the Arts 63 Motivation 64 Appendix: Methodology 64 Resident Tables 67 References 73 Conclusion 74 Total Economic Impact of the Arts in Watauga County, North Carolina 74 Discussion 74 The Economic Impact of the Arts in Watauga County: Executive Summary Purpose of the Study Watauga County, North Carolina benefits from a diverse group of arts presenting and arts performing organizations. In addition to engaging the public, arts organizations have an economic impact on the county in terms of jobs and income for workers, and sales revenue for businesses. The purpose of this study was to estimate this economic impact. Scope of the Study To assess the economic impact of the arts in Watauga County, three surveys were administered from June 2002 through March 2003. First, arts patrons (both residents and visitors to Watauga County) were surveyed. These surveys asked arts patrons to list their spending on arts performances as well as their other spending and other information about their attendance at arts events. Second, individual artists and arts organizations were surveyed. This group was asked about the type of arts activities they engaged in as well as their sales revenues and expenditures on arts-related activities. The final group surveyed was Watauga County residents. Residents were asked about their spending on the arts and to indicate their willingness to support the arts in Watauga County. Research Procedures Members of the research team and volunteers utilized a purposive sampling procedure to survey arts patrons in Watauga County. The arts patrons data was collected at fifteen arts events, some related to Appalachian State University and others not related to Appalachian State University. In all, 1,091 arts patron surveys were administered. Members of the research team and volunteers utilized a census survey to collect data on artists and arts organizations. A referral procedure was employed to identify all artists and arts organizations in Watauga County. Mail surveys were sent to all 355 identified artists and arts organizations. Sixty-two surveys were returned for a response rate of nearly eighteen percent. Members of the research team and volunteers utilized a random sampling procedure to collect data on Watauga County residents. A mailing list was generated from public phone records and 225 respondents were randomly selected from the list. Of those mailed, 117 were returned for a response rate of 52%. Supplementary data was collected at additional locations yielding a final sample of 215. Findings The total direct economic impact of arts patrons was computed to be the sum of the amount directly spent by arts patrons for arts events, $6,178,106, plus the additional amount spent by arts patrons visiting Watauga County to attend an arts event, $4,911,169. The total economic impact of arts patrons in Watauga County was estimated to be $11,089,275. The total direct economic impact of artists and arts organizations was estimated to be the sum of the sales revenue generated by artists and arts organizations within Watauga County, $7,260,318, employee payroll expenses incurred by artists and arts organizations in Watauga County, $7,478,309, and expenses paid to sub-contractors in Watauga County, $102,076. The total economic impact of artists and arts organizations in Watauga County was estimated to be $14,840,703. The investigation of resident preferences reveals that those living in Watauga County receive significant direct benefits from the participation in and consumption of art activities and significant indirect benefits from secondary positive impacts to economic and cultural development. Related to the direct benefits, the typical Watauga County household attended five events each year and spent $156 at the events each year. This translates to local households spending about $2.5 million each year at art events. Related to the indirect cultural and economic benefits, Watauga County residents indicated a willingness to financially support efforts to maintain current levels of art activity. Fifty-seven percent of residents indicated they would be willing to make an annual payment above and beyond any direct expenditure on art activities to avoid a reduction in local art activity. The average willingness to pay for current levels of art activity was estimated to be just over $15 per year for each adult, which translates to a community value of $539,659 per year. The two most common reasons for support provided by residents were the importance of art to our local culture and the importance of art to our local economy. The total economic impact of the arts in Watauga County, North Carolina was computed to be the sum of the economic impact of arts patrons (residents and tourists) in Watauga County, $11,089,275; plus the economic impact of artists and arts organizations operating in Watauga County, $14,840,703; plus an additional amount representing the willingness of Watauga County residents to support the arts in the county, $539,658. Therefore, the total economic impact of the arts in Watauga County was estimated to be $26,469,636. Limitations A random sampling procedure would have been preferable for surveying arts patrons (residents and tourists), nevertheless practical limitations precluded this procedure. However, the $26,469,636 economic impact estimated reported herein is expected to be low. There are several reasons for this expectation. First, the marginal effect of property taxes paid by resident art patrons, artists and art organizations were not accounted for. Second, not all arts events in Watauga County were sampled, leading to an underestimate of number of attendees and their resultant spending. Third, no attempt was made to account for arts events occurring in restaurants and bars in Watauga County. Finally, the study ignores the multiplier effect - additional spending on items such as additional supplies or any other good or service needed to supply a business, the amount of money arts employees spend as part of their daily lives in grocery stores and malls, and the additional jobs that result from this spending. Conclusions One of the strengths of this study was the multidimensional nature of the groups surveyed (i.e., arts patrons, artists and arts organizations, and residents). The $26,469,636 economic impact estimate seems to compare well with other estimates of economic activity in Watauga County. For example, the Boone Chamber of Commerce reported 2001 retail sales of $670 million. Further, the North Carolina Department of Commerce estimated tourism spending in Watauga County for the year 2001 to be $147.32 million. Overall, the results of this study suggest that the arts are one of the major industries in Watauga County, North Carolina. Introduction Watauga County, North Carolina benefits from a diverse group of arts presenting and performing organizations. These organizations present many arts activities and events including but not limited to music events, theater, dance, painting, pottery, photography, crafts, film, folk arts, sculpture, storytelling, jewelry, ceramics and drawing among others. These organizations provide entertainment and education for arts audiences, opportunities for artists and opportunities for volunteer workers. For the purpose of the present report, the arts were defined as:
This study examines the economic impact of the arts industry in Watauga County, North Carolina. The arts industry in Watauga County incorporates a variety of arts presenting and arts performing organizations including galleries, indoor and outdoor performing arts facilities, street fairs and festivals, etc. The organizations surveyed for this study included all of these categories of arts venues and more. However, it important to recognize that this study understates the overall economic impact of the entire arts industry in Watauga County. A thorough discussion of the nature of this underestimate is presented in the conclusion of this report. To assess the economic impact of the arts in Watauga County, three surveys were administered. First, arts patrons in Watauga County, including residents and visitors, were surveyed. These surveys asked arts patrons to list their spending on arts performances and other information about their attendance at arts performances. The second study group comprised individual artists and arts organizations and other groups with significant arts-related activities. This group was asked about the type of arts activities they engaged in as well as their revenues and expenditures on arts activities. The final group surveyed was Watauga County residents. The residents were asked about their spending on the arts and to provide information regarding their attendance at arts activities and performances. Together, these groups provided a detailed understanding of some of the economic contributions of the arts to Watauga County. The following sections discuss in some detail the research that was conducted and the results that were obtained, beginning with Watauga County arts patrons, then arts organizations, and finally residents.
SECTION I THE ECONOMIC IMPACT OF THE ARTS IN WATAUGA COUNTY: ARTS PATRON RESPONSES June 2002 - May 2003 1Responses from the Arts Patrons The research team, along with a team of volunteers, surveyed arts patrons across several arts events, in several areas of the county, for several months. The following sections describe the survey instrument and procedure, provide a comparison of Appalachian State University (ASU) and Non-Appalachian State University patrons, describe arts patron demographics and arts patron knowledge and experience with the arts, and present an estimate of the economic impact of arts patrons in Watauga County.
A survey instrument was created that asked arts patrons about three general classes of information: (1) their knowledge and familiarity with the arts, (2) their arts patronage behavior, and (3) demographic questions. Researchers and volunteers administered the survey at fifteen arts events including several from ASU (The North Carolina Symphony POPS, Mike Cross, Eastern Philharmonic I and II, Paul Taylor Dance Company, Glen Miller Orchestra, Laurie Anderson, Diamond Rio and Madame Butterfly) as well as those not related to Appalachian State University (Doc Watson Music Festival, The North Carolina Symphony at Chetola, Boone Streetfest, Valle Crucis Country Fair, Arts Council Gallery Receptions, Blowing Rock Stage Company and the Appalachian Cultural Museum). Of the 1,091 arts patrons surveyed, 743 responses were from ASU-related events (68.1%) and 348 (31.9%) were from non-ASU events. Comparison of Appalachian and Non-Appalachian Patrons Table I-31 compares survey responses from those arts patrons attending ASU events and those attending non-ASU events. As can be seen in the table, no differences between the two groups were found for household interest in the arts (both groups expressed high interest in the arts), their chances of attending arts events in Watauga County in the next twelve months, the number of nights the art activity caused them to stay longer, whether the presence of the arts influenced their decision to reside in Watauga County (both groups indicated a moderate influence), the amount of county and city property tax paid, the number of people in the respondent's travel party attending the art event, the number of people under eighteen years of age in the travel party, and the age of the respondent. However, significant differences between the groups were found for several survey questions. For example, arts patrons attending ASU-related events indicated a higher level of familiarity with the arts in Watauga County and reported that they attended more arts events than those arts patrons attending non-ASU events. Conversely, non-ASU arts patrons reported spending more money to attend each arts event in Watauga County, although ASU arts patrons reported spending more money during their trip to Watauga County to attend the arts event where they were surveyed. Finally, ASU arts patrons reported that they spent more nights in Watauga County and had larger travel parties, and more retired people in their travel parties than arts patrons attending non-ASU events.
This section provides a general description of the arts patrons in Watauga County in terms of where they reside and their gender and socioeconomic characteristics. Location. A total of 1091 respondents completed the arts patron survey. Of those, just over 71% were from North Carolina, almost 15% were from Florida, and just over 4% were from Tennessee (see Table I-22). Table I-23 and Figures 1-5 show the three-digit zip code geographic areas from which a majority of Watauga County arts patrons come. In North Carolina, about 51% of patrons were from the Hickory 3-digit zip code zone (Figure 1), 6.16% were from Charlotte (Figure 2), 4.62% were from Greensboro (Figure 4), 3.59% were from Raleigh and 3.49% were from Asheville (Table I-23A). Of the patrons from Florida, 4.83% were from West Palm Beach (Figure 3), 3.8% were from Miami, and about 1.33% were from Tampa. Finally, arts patrons from Tennessee included 3.8% from Johnson City (Figure 5). Areas of Dominant Influence. Arbitron, a television rating service that publishes regular reports for selected markets, has developed a measure called Area of Dominant Influence (ADI). The ADI is a geographic designation that specifies which counties fall into a specific television market. As can be seen in Table I-23B, 57% of Watauga County's arts patrons come from the Charlotte, NC ADI which includes Watauga County and 9.65% come from the Miami, FL area of dominant influence. Other important television markets include Raleigh-Durham (6.37%), Greensboro/Winston-Salem (4.62%), and the tri-cities area of Tennessee (4.11%). Gender and Socioeconomics. Of the arts patrons responding, 63.53% were female and 36.47% were male (Table I-26). The arts patrons surveyed were an older group, with over 66% reporting that they were 46 years of age or older (Table I-27). The educational level of respondents was high, slightly more than 45% had a bachelor's degree or higher (Table I-29). Arts patrons also had a high household income, with just under 25% making more than $100,000 per year and almost 79% making at least $40,000 per year (Table I-30). The average number of arts patrons in each travel party was reported to be four (Table I-24). On average, each travel party had one arts patron who was under eighteen years of age and another who was retired. Just over fifty-four percent of the respondents belonged to the American Automobile Association (AAA) and slightly more than 46% belonged to the American Association of Retired Persons (AARP) (Table I-28). Almost forty-four percent of the arts patrons were visitors to Watauga County (Table I-11). Roughly thirty-eight percent were full-time residents and eighteen percent were part-time residents of Watauga County. Of the arts patrons that were visitors to Watauga County, almost 74% were visiting to attend a specific art event (Table I-12), and only a small proportion (2.84%) were staying in Watauga County any longer than they otherwise would have had the art event not been offered (Table I-13A). Of those visitors staying longer due to the arts event, the average number of nights they reported staying longer was almost eight, although the median number of nights they reported staying longer suggests this estimate was slightly upwardly biased (Table I-13B). Over 80% of the visitors reported that they were staying overnight (Table I-15A), and the average number of nights that they reported staying in Watauga County was eleven, although the median number of nights visitors reported staying was three, suggesting an upward bias of the estimate (Table I-15B). While staying in Watauga County visitors reported engaging in various activities such as patronizing area restaurants (37%), shopping (28%), engaging in recreational activities (15%) and visiting area attractions (15%) (Table I-14). Of the arts patrons that were full- or part-time residents of Watauga County, almost 64% reported that the presence of the arts had some or much influence in their desire to reside in the county (Table I-20).
As would be expected from arts patrons, 82% of respondents said that their households were either interested or very interested in the arts (Table I-1). However, just over 41% of arts patrons reported that their households were familiar or very familiar with the arts in Watauga County (Table I-4). The types of arts activities that they preferred are shown in Table I-2. Music events were the most preferred followed by theater, dance, painting and photography. Arts patrons indicated that they most frequented street fairs and festivals, then indoor performing arts facilities, museums, outdoor performing arts events, and galleries (Table I-3). Over sixty-three percent of arts patrons indicated that the presence of the arts affected their decision to visit or live in Watauga County (Table I-6). Seventy-five percent reported that they would either likely or definitely attend another art event in Watauga County within the next twelve months (Table I-8). Most of the arts patrons attended arts events in Boone (38.66%) and Blowing Rock (27.85%) and to a lesser extent Valle Crucis (13.35%) (Table I-9). They reported learning of arts events through newspapers (23.75%), friends or family (17.39%), brochures (14.60%) and the radio (10.56%) (Table I-10). Arts patrons reported that adult females were the most influential in the household when choosing arts events to attend (40.26%), followed by a group decision (28.54%), and a decision made by an adult male (13.84%) (Table I-25).
The economic impact of arts patrons in Watauga County was computed as the sum of arts patronage spending and additional spending by visiting arts patrons. Arts Patronage Impact. Arts patrons reported that the average number of arts events their households attended in the past twelve months was almost 9 (Table I-5). There was an estimated 31,107 arts patrons attending the arts events surveyed (Table I-32). Since the average household size was reported to be four, there were approximately 7,776 households attending the arts events surveyed. A weighted average was used to compute the total dollars spent by arts patrons for each arts event. For example, 450 people reportedly attended the Madame Butterfly performance (112 households). Since respondents at the Madame Butterfly performance reported spending $59.26 per household on each arts event attended, the total amount spent on arts events by Madame Butterfly households was computed to be $59,734 = (112 households) x ($59.26/household) x (9 arts events attended by household per year). This same procedure was followed for each arts event with the exception of the Blowing Rock Stage Company and Appalachian Cultural Museum events where the number of surveyed guests was so small as to have a negligible effect on the present computations. Using the aforementioned procedure, the total dollars spent on arts events by arts patrons was estimated to be $6,178,106. Arts Patron Visitors Additional Spending. About 44% of the respondents were visitors to Watauga County (Table I-11). Of these, almost 82% reported that they stayed overnight (Table I-15A). Many (35%) stayed with family or friends, in a hotel or motel (30%), or house or cabin rental (13%) (Table I-16). Many respondents reported that they patronized medium priced/full service restaurants (36%), gourmet/full service restaurants (15%), and restaurants that specialized in regional cuisine (15%) and fast food restaurants (15%). A second weighted average was used to account for this additional spending by arts patrons in Watauga County. The amount respondents indicated they spent for their household attendance to the arts event was subtracted from their total spending in Watauga County to attend the arts event (Table I-32). This difference was computed for each arts event with the exception of the Blowing Rock Stage Company and Appalachian Cultural Museum events where the number of surveyed guests was so small as to have a negligible effect on the present computations. The number of attendees at each arts event was then divided by four (to get number of households) multiplied by 44% (the percentage of attendees estimated to be visitors) and 82% (the estimated number of visitors staying overnight). This resulting household overnight visitor figure was then multiplied by the differential spending amount to arrive at a weighted average for all households. This weighted average was next multiplied by six, the average number of arts events visiting arts patrons reported attending in the past twelve months. Following this procedure the total dollars spent in Watauga County in addition to arts events by visiting arts patrons was estimated to be $4,911,169. Total Economic Impact of Arts Patrons. The total direct economic impact of the arts patrons was computed to be the sum of the amount directly spent by arts patrons for arts events, $6,178,106, plus the additional amount spent by arts patrons visiting Watauga County to attend an arts event, $4,911,169. The total economic impact of the arts patrons in Watauga County is estimated to be $11,089,275. 1
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