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Economic Impacts of Cultural Events on Local Economies: An Input—Output Analysis of the Kaustinen Folk Music Festival

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  • Timo Tohmo

    (School of Business and Economics, Centre for Economic Research, University of Jyväskylä, PO Box 35, 40351 Jyväskylä, Finland)

Abstract

This paper examines the economic impacts of Finland's Kaustinen Folk Music Festival. The impacts are calculated on output, demand and wages, employment and on national and regional taxes. The results indicate, first, that the effects of the festival on output are about ₠1.7 million. Kaustinen can also be seen as a good investment for the local municipality, as regional tax revenues increased by about ₠65,600 in the year studied, while the annual subsidy was ₠40,365. From the perspective of the Keski-Pohjanmaa region as a whole, the Kaustinen Folk Music Festival has a substantial impact on regional incomes through subsidies (about one-fifth of the costs of the festival is offset by subsidies from the Arts Council of Finland (Ilmonen et al , 1995) and the direct and indirect effects of consumption by festival visitors in different economic sectors. The impact on employment in the region is low (27 employees). The mobilization of voluntary labour, not measured in this study, is, however, considerable. Although the input–output method is laborious and statistically complex, it is very suitable for measuring the impact of tourism or cultural events on local economies. The method provides results that can be used in framing regional policy.

Suggested Citation

  • Timo Tohmo, 2005. "Economic Impacts of Cultural Events on Local Economies: An Input—Output Analysis of the Kaustinen Folk Music Festival," Tourism Economics, , vol. 11(3), pages 431-451, September.
    • Handle: RePEc:sae:toueco:v:11:y:2005:i:3:p:431-451
    DOI: 10.5367/000000005774352980
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    1. Timo Tohmo, 2004. "New Developments in the Use of Location Quotients to Estimate Regional Input-Output Coefficients and Multipliers," Regional Studies, Taylor & Francis Journals, vol. 38(1), pages 43-54.
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    7. Attanasi, Giuseppe & Casoria, Fortuna & Centorrino, Samuele & Urso, Giulia, 2013. "Cultural investment, local development and instantaneous social capital: A case study of a gathering festival in the South of Italy," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 47(C), pages 228-247.
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    12. Nathan P. Kemper & Jennie S. Popp & Wayne P. Miller, 2008. "Regional Growth and Beaver Lake: A Study of Recreation Visitors," Tourism Economics, , vol. 14(2), pages 409-426, June.
    13. Enrico Bertacchini & Chiara Dalle Nogare, 2021. "The economics of cultural tourism: New topics and methods," Tourism Economics, , vol. 27(6), pages 1177-1184, September.
    14. Lee, Insun & Arcodia, Charles & Lee, Timothy Jeonglyeol, 2012. "Benefits of visiting a multicultural festival: The case of South Korea," Tourism Management, Elsevier, vol. 33(2), pages 334-340.
    15. Johannes Glückler & Robert Panitz, 2023. "Live Music in the Time of Corona: On the Resilience and Impact of a Philharmonic Orchestra on the Urban Economy," Sustainability, MDPI, vol. 15(4), pages 1-14, February.
    16. Haiyan Huang & Luke Lunhua Mao & Suk-Kyu Kim & James J. Zhang, 2014. "Assessing the Economic Impact of Three Major Sport Events in China: The Perspective of aTtendees," Tourism Economics, , vol. 20(6), pages 1277-1296, December.
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