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Blue Notes: Slovenian jazz festivals and their contribution to the
economic and social resilience of the host cities
Andrej Srakar+ & Marilena Vecco*
+ Institute for Economic Research and University of Ljubljana, Ljubljana, Slovenia
*Erasmus School of History, Culture and Communication, Erasmus University
Rotterdam, The Netherlands
STILL PRELIMINARY – PLEASE DON’T QUOTE OR CITE
Corresponding author:
Marilena Vecco
Erasmus University Rotterdam, Burg. Oudlaan 50 3062 PA, Rotterdam (NL)
E-mail: [email protected]
Tel.: +31 10 408-2447
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Blue Notes: Slovenian jazz festivals and their contribution to the
economic and social resilience of the host cities
In our article we explore the effects of two Slovenian jazz festivals on the economic
resilience of the host cities: Jazzinty Novo mesto and Jazz Cerkno. Due to the
small-medium size of the host cities and remoteness from the Slovenian capital
Ljubljana, it is expected that the festivals would serve as important stimulators for
economic and social environment in those peripheral areas. They can represent a
source of sustainable growth towards the challenges of the post-industrialisation
economy. Using monthly-based dataset of SORS, covering the period 2008-2015,
and ex-post econometric verification methodology (time-series and panel data
methods), we estimate the effects of these festivals on tourism inflows and
employment. The results confirm important effects of the events on tourism and
employment in both cities, but with wide variation across the years, being more
present in the earlier years of the festivals, and being on a very different scale for
both cities. This may be largely attributed to the “home-grown” nature of both
festivals. We conclude by reflection on the importance and scientific relevance of
the results for studying festivals as a resilience-enhancing mechanism for the
smaller cities.
Keywords: economic impact, ex-post econometric verification, resilience, jazz,
festivals, Slovenia
1. Introduction
Within the broad spectrum of ‘music festivals’, jazz festivals occupy a significant role.
In the last decades this genre become a widespread phenomenon: the number of large and
small jazz festivals has been intensively growing across Europe1. Several studies (i.e.
Riley and Laine, 2006; Allen et al., 2011; Andersson et al., 2013) proved the viability and
prospects of jazz festivals in their social, economic and cultural dimension. Besides the
1 The most used among practitioners database of festivals throughout Europe (http://jazzfests.net/) includes
1408; accessed on August 20, 2016.
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social and economic values generated by any festival, jazz festivals specificity is
represented by its function to preserve and transmit jazz heritage, intercultural exchange
between different national jazz cultures, festivals expand the jazz target audience, and
foster demand for live music (Hiller, 2016). Moreover, festivals generate a sense of
community and festive atmosphere, they imply a social ritual as gathering people around
a special event (Goldblatt, 1997). Jazz festivals as other typologies of festival become a
creative destination (Prentice and Andersen, 2003) and experienced a boom phase (Frey,
2000). Over time, the relationship between festivals and tourism become stronger. Music
festivals as all cultural festivals represent a core topic of tourism marketing: “The arts
create attractions for tourism and tourism supplies extra audiences for the arts”
Myerscough (1998, p. 80). Festivals are tourist attractions and generate tourist flows (i.e.
Quinn, 2006; Getz, 2010). Arguably, their survival and transmission are based on the
ability to create links between endogenous resources and exogenous forces (Quinn,
2005). There are very few studies dealing with the economic impact of small events.
Therefore, our study investigates the importance of small-medium festivals for local
economic development and as tourism attractions in Slovenia. Specifically, we explore
the effects of two jazz festivals in Slovenia on the economic and social resilience of the
host cities (as a combination of two reactions noted above: the ability of a regional
economy to withstand external pressures; and its capacity to respond positively to external
change): Jazzinty in Novo mesto and Jazz Cerkno in Cerkno. Established in different
years, these festivals take place in small-medium sized cities, quite far from the Slovenia
capital Ljubljana. Due to the size of the host cities and remoteness from Ljubljana, the
festivals serve as important stimulators for economic and social environment of those
small cities, providing them a “buffer” against unexpected shocks and a source of
sustainable growth towards the challenges of the post-industrialisation economy. Using
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datasets of SORS (municipality level data) and data from local tourism offices on tourism,
local employment and revenues of local (municipal) companies, covering the period
2004-2015, we estimate the effects of the festivals on tourism inflows and on the
economy, and by this the ability of a local economy to withstand external pressures in
economic and social terms. To this end, we use an ex-post econometric verification
approach (using panel data difference-in-differences modelling, complemented by time
series intervention analysis approach), originating in sport economics and being used in
cultural economics extremely seldom (see e.g. Skinner, 2006; Kovač and Srakar, 2013;
Srakar, Vecco and Slabe-Erker, 2015). This enables us to estimate the effects of the
festivals for the two Slovenian smaller cities (at least compared to European cities),
enhancing the economic and social resilience of the local environment. Our main research
questions, therefore, are: 1) Do the festivals support the local development (Greffe et al,
2005; Kovač and Srakar, 2013) and (to what extent) do they provide any notable effect
on local tourism, employment and incomes of companies in the three cities? 2) To what
extent do the festivals enhance the resilience of the two cities and in which aspects? 3)
Are there any notable difference in the effects between the two cities (depending e.g. on
size, geographic location, economic development, etc.)? 4) Can ex-post econometric
verification as a developing method serve as a valid and appropriate tool to estimate the
economic and social effects of events on the host environment and its resilience?
The remainder of the paper is structured as follows. Following this introduction, the
second section presents a literature review on the concepts of jazz festival and resilience
to contextualize the present research. In the third section, the two jazz festivals are
introduced with their main socio-demographic characteristics. The fourth section
introduces the methods and the analysis of the economic effects of these festivals on
tourism inflows and on the economy. Through the application of ex-post econometric
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verification approach, we identify the ability of a local economy to withstand external
pressures in economic and social terms. Finally, after the discussion of the main findings,
some concluding remarks on the social and economic enhancement of these two jazz
festivals on the local economy are proposed in the sixth section.
2. Jazz festivals and resilience
A music festival is a “product bundling” (Choi, 2003) as in addition to the art itself, in its
frame there is a significant role of places, geography and environment, way the festival
is organized and presented, attractiveness for tourists, etc. Moreover, a music festival - as
other festivals - possesses the unity of time, place and action, gathering a specific target
audience towards which the artistic concept is addressed. Festivals act as intermediaries
between producers and consumers of “aural goods” (Paleo & Wijnberg, 2006, p. 50). A
variety of festival impacts have been discussed academically. Building on the
classification proposed by Robertson et al. (2009), of the existing literature, to the six
themes related to the evaluation of socio-cultural impacts (festivals and policy;
stakeholders; social impacts and social impact measurement scales; community and
networks; community and social capital; and festival directors2), we add three emerging
themes strictly related to the organizational dimension of the festivals: festival quality
(Tkaczynski and Stokes, 2010; Linko and Silvanto, 2011; Chen et al, 2012; Wong et al.,
2015), programming (Yan et al. 2012) and marketing segmentation (Formica & Uysal
1996; Burland and Pitts 2010; Báez and Devesa, 2014).
Several scholars (Bianchini, 1996; Quinn, 2005; Crespi-Vallbona and Richards, 2007;
Getz, 2009, 1991; Williams and Bowdin, 2007; Moscardo, 2007; Small, 2007; Formica,
2 Refer to Robertson et al; (2009), Getz (2010), Whitford (2013) and Brown et al. (2015) to an extensive
literature on these topics.
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2008; Formica and Murrmann, 1998; O’Sullivan et al., 2009; Robertson et al., 2009;
Wood, E. (2009); Kavaratzis, 2011; Oakes and Warnaby, 2011; Clifton et al., 2012; Van
Winkle and Woosnam, 2014) investigate the contribution of festivals in city development
or regional development as a touristic attraction tool, city imagine and its marketing and
the impact of local community. Getz (2010) in his large-scale literature review of 423
academic articles identifies the most commonly acknowledged festivals’ positive
impacts: economic, social, cultural, personal impact, urban renewal, development and
environmental impacts. Despite the relevance of jazz festivals, some scholars identified
a loose of festival social significance for the local inhabitants as the clear values shift
towards the economic utility dimension became more evident (Richards and Wilson,
2004; Quinn, 2006; Okech, 2011). However, cultural policy makers are convinced that
festivals may contribute to the city’s image betterment, create place distinctiveness and
draw visitors and tourists - all in order to generate economic benefits (Schuster, 1995;
Frey, 2000; Saayman and Saayman, 2006; Quinn 2013). Much research has been done on
the role that festivals play in economic development. Invariably, they are expected to
foster the cosmopolitan dimension of the city (i.e. Thrane, 2002; Moscardo, 2007; Waitt,
2008) and a positive image as a destination (Schuster, 1995; Quinn, 2005; Getz et al,
2008; Johansson and Kociatkiewicz, 2011).
The importance of acknowledging jazz festivals’ impacts is well documented in the
literature. Nonetheless evaluative research has, until very recently, adopted
predominantly the economic impact approach (Bracalente et al., 2011; Saayman &
Rossouw, 2010, 2011; Riley and Dave Laing 2006; Jones and Munday, 2004; Janeczko
et al., 2002; Brown et al., 2002; Thrane, 2002). In most instances, an estimate of an
aggregate measure of income and employment change attributable to the festival is used.
This approach and the regional economic models on which it is related to were originally
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developed to explain the effects of exogenous changes in demand on an area’s economy,
and in particular, to explain the growth effects of increased spending for a region’s
exports (e.g. Krikelas, 1992; Hunter, 1989). Constantly, the results are positive and are
then used to make the demand for public support for the festival stronger with based
evidence. However, this approach reveals some limitations as it misinterprets the benefits
of arts and cultural organisations (Sterngold, 2004; Seaman, 2000) and the analysis
finishes “prematurely with the estimation of local multiplier effects but without
progressing one stage further and illustrating how these translate into local economic
growth” (Okech, 2011, p. 187). Additionally, some key factors responsible for the
inaccuracy of direct expenditure forecasts have been identified (Ramchandani &
Coleman, 2012).
As stated by Holling “The resilience is not only the capacity to absorb shocks and
maintain function, but it also includes a second aspect concerning the capacity for
renewal, re-organization and development, to be taken into consideration for redesigning
a sustainable future” (Holling, 1973, p. 17, see also, 1986, 2001). In the literature we can
identify several approaches to define resilience: for some authors (Horne and Orr, 1998;
Sutcliffe and Vogus, 2003) resilience derives from a return to a stable state after a
perturbation; Douglas and Wildavsky (1982, p. 196) specifically defined resilience as
“the capacity to use change to better cope with the unknown: it is learning to bounce
back”. In a similar way, Dynes (2003) connected the concept of resilience to an emergent
behaviour, based on improvisation and adaptation, while Kendra and Wachtendorf (2003)
stressed the creativity in the adaptive process. Furthermore, Davies (2011) identifies three
types of reactions: the ability of a regional economy to withstand external pressures, its
capacity to respond positively to external change, and its long-term adaptability or
learning capacity (see e.g. Lazzaretti, 2015).
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Recently, some scholars pinpoint the relation between festivals and sustainability (Getz
and Andersson, 2008; Getz et al., 2013; Zifkos, 2014; Bormann, 2015). This call to
sustainability may be considered as part of a broader research and societal goal (see
ICOMOS’ concept note, 2016). Although Zifkos (2014) identified three distinguished use
of the concept of sustainable festivals (namely, as green festival, as festival’s ability to be
“sustained” - meaning to survive endure as an organization, and finally how festival
organisations can achieve long-term viability within their community). However, in the
literature there is no reference on the relationship between the festival sustainability and
the economy of the host location. Building on the concept of sustainability, rooted to the
Latin word sustinere (sus: tenere) which refers to the capacity to “maintain”, “endure” or
“support” (Thiele, 2013), we investigate the impact of the two festivals on the economic
and social resilience of the host cities.
Festivals in small regional destinations often play an important role in tourism
development and thereby in local economic development. They can be considered as
good examples of the relocalisation movement: “Relocalization is a strategy to build
societies based on the local production of food, energy and goods, and the local
development of currency, governance and culture. The main goals of relocalization are to
increase community energy security, to strengthen local economies, and to improve
environmental conditions and social equity. The relocalisation strategy developed in
response to the environmental, social, political and economic impacts of global over-
reliance on cheap energy.” (http://www.postcarbon.org/relocalize, accessed on August
17. 2016). Relocalisation or sustainable degrowth aims at increasing resilience and
wellbeing in local communities as a response to interrelated social-ecological threats
emerging on a global-scale (Curtis, 2005; Hopkins, 2008; Victor, 2008; Swilling &
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Annecke, 2012). The main focus is to strengthening the resilience of local communities
and undercutting the need of an unstainable development.
A scan of the literature allows us to identify five main functions that a festival can assume
within the resilience framework: the festival can serve as a showcase for a city, and the
destination can be branded by festival as well (Derrett, 2004). Second, the festival can
serve as a creative destination as they provide an opportunity for specialization (theme,
target audience, etc.). Third, festivals are attractions for visitors and are usually closely
connected to tourism (for example, Getz, 1989; Frey, 2000) and may contribute to their
sustainable development. Fourth, festivals “renew periodically the life stream of a
community and give sanctions to its institutions” (Falassi 1987: 3). Fifth, festivals can
perform a very useful community service as they enhance both group and place identity
(De Bres & Davis, 2001), contribution to reinforce identities, interests and goals that are
socially constructed in a relocalisation perspective.
3. The two Slovenian jazz festivals
Slovenia has eight jazz festivals which take place mostly during the summer period. As
tourism attractors/drivers, festivals are organised in areas that present some cultural or
natural interests. In our specific case, Jazzinty takes place since the year 2000 in smaller
city of Novo Mesto. It is organized by a group of young jazz enthusiasts and provides a
cultural arena gathering international jazz workshops, performances and composition
awards together. Jazz Cerkno is taking place in a small and remote city of Cerkno and
originates already in year 1996.
Jazz Cerkno Festival is an annual international music festival organised by Jazz Cerkno
Institute. Festival events take place every May in the "old square" next to Pr Gabrijelu
("At Gabriels") bar, which also functions as the local social and musical epicentre.
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Jazz Cerkno presents various international high-quality music groups and musicians from
a wide variety of music genres: contemporary and avant-garde jazz can be heard
alongside freely improvised music, imaginative folk music, post-rock and rock-in-
opposition – mixing acoustic, electric and electro-acoustic sounds. There are concerts,
jam sessions, regular workshops, various exhibitions, among them a regular exhibition of
music photography. In 1996 a group of local music enthusiasts launched the festival
which has gradually transformed itself into one of the most important jazz festivals held
in Slovenia, next to the jazz festivals in Ljubljana and Maribor. Boštjan Cvek (1964–
2015) should be mentioned as a co-founder and spiritus movens of the Jazz Cerkno and
Keltika festival, respectively.
Jazz Cerkno Festival started as a domestic music event squeezed into a small but vivid
room in the bar. At the beginning, the programme primarily centred around Slovene
groups and performers. The big break-through in every way possible – organisational,
musical and social – came in 2000 when the event moved outdoors, out of town, and
under a tent. For the first time the programme gained a real international character,
marked particularly by a free energetic concert by the trio Brotzmann/Ludi/Hano. In
many ways the impact of the powerful trio paved the way for further considerations about
the programme, the nature of the event, and its location. Finally, in 2003 the festival
moved back to the town of Cerkno and for the first time took place in the "old square".
The 3-day event is well-known for its relaxed atmosphere, intimacy, good and
knowledgeable crowd of 300–400 people and some local particularities.
Since 2000 the Jazzinty International Music Workshop and Festival has been taking place
every August at the LokalPatriot club in Novo mesto. Foreign jazz musicians and
pedagogues are invited every year to run the workshops and to play at the festival. These
jazz events have become one of the main international musical events in the region of
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Dolenjska. In spite of rather conventional musical programming there's also a space for
more progressive performers, teachers, and concerts. The Jazzon Award is bestowed
every year. The Jazzon Alpe-Adria competition is open for the composers from Slovenia,
Austria and Croatia.
Figure 1: Locations of Slovenian jazz festivals
Notes: 1 – Jazz Etno Funky Festival, Koper; 2 – Jazz Cerkno; 3 – Ljubljana Jazz Festival; 4 – Veronica’s Tales,
Kamnik; 5 – Jazzinty Novo mesto; 6 – Džjezz Celje; 7 –Slovenian Jazz Festival, Ravne na Koroškem; 8 – Festival
Lent, Maribor.
Source: Own adaptation on the basis of European Jazz Network, http://www.europejazz.net/jazz/festivals/si
According to the framework developed by O’Sullivan, Jackson (2002)3, these jazz
festivals cluster in the category of home-grown festivals, where a ‘home-grown’ festival
is essentially small scale, bottom-up and run by one or more volunteers for the benefit of
the locality. A ‘tourist-tempter’ festival is one that is aimed specifically at attracting
visitors to stimulate local economic development. A‘big-bang’ festival is essentially a
marketing tool that promotes a myriad of related activities over a defined geographical
3 Three types of festival were identified: (i) ‘home-grown’; (ii) ‘tourist-tempter’; (iii) ‘big-bang’
(O’Sullivan, Jackson, 2002, p. 331).
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area. Table 2 identifies the festival typologies defined for this study and summarises the
characteristics of each case study area.
Table 1: Typology of festivals: characteristics of the case study examples
Festival Type 1:
"home-grown"
Festival Type 2:
"tourist-tempter"
Festival Type 3:
"big-bang"
Size by
population Small Medium Large
Spatial
geography Rural/Semi-rural Urban/Urban-fringe Urban
Major
theme Arts/culture/entertainment Arts/culture/entertainment Arts/culture/entertainment
Organizing
drivers
Community led/Public
and private sector support Local authority
Public/private/voluntary
sector
Key
management
group
Voluntary sector driven Local authority driven Partnership driven
Primary
purpose for
holding a
festival
Cultural and/or
entertainment benefits for
locals and visitors
Economic development
via tourism
Economic development
for partners/cultural and
entertainment benefit for
locals and visitors
Source: O’Sullivan, Jackson, 2002, p. 331
4. Data and Methods
The present section introduces the main variables, their descriptive statistics and methods
used. To reply to the research questions of our study, we paid primarily attention to the
tourism flows generated, if any, by the selected jazz festivals. To this end, we follow
Skinner (2006), Srakar, Vecco and Slabe-Erker (2016) and Srakar and Vecco (2016) and
use a two-part methodology. Firstly, we adopt univariate interrupted time series
econometric method. This implies the construction of models with the following
independent variables: tourist arrivals – total and foreign, tourist overnight stays – total
and foreign; and number of employed persons. Secondly, we perform robustness check
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and use models from panel data analysis (static models) to assess the impact of the events
on tourism and employment.
Our data set is compiled from Statistical Office of Republic of Slovenia (SORS) data. We
use data on different tourism and employment variables from January 2008 to April 2016
for 212 Slovenian municipalities. Further, for the panel data analysis we collect several
municipality-level variables covering the same period. Table 1 shows short descriptive
statistics of the key variables included in the time series.
Table 2: Descriptive statistics of key variables
Variable N Mean SD Min Max
Tourist arrivals, Cerkno 100 901.58 671.02 56 2497
Tourist arrivals, foreign, Cerkno 100 359.51 224.87 30 1035
Tourist overnight stays, Cerkno 99 3054.99 2670.54 89 9481
Tourist overnight stays, foreign, Cerkno 100 1280.43 1029.68 43 4866
Tourist arrivals, Novo mesto 100 2378.72 779.17 1157 4619
Tourist arrivals, foreign, Novo mesto 100 1743.53 741.75 714 3897
Tourist overnight stays, Novo mesto 100 5117.16 2019.37 2402 10417
Tourist overnight stays, foreign, Novo
mesto 100 3911.06 1832.70 1497 8615
Tourist arrivals, Slovenia 100 269083.40 107510.70 153320 630579
Tourist arrivals, foreign, Slovenia 100 174879.40 87980.97 78675 472625
Tourist overnight stays, Slovenia 100 767270.60 352661.30 419652 1789727
Tourist overnight stays, foreign, Slovenia 100 456940.70 255247.80 204831 1258217
Number of employed, Cerkno 100 1395.47 114.98 1234 1654
Number of employed, Novo mesto 100 21018.47 582.51 19979 22076
Number of employed, Slovenia 100 732598.90 30568.06 691511 798533
Source: Own calculations.
Our time series methodology consists of several steps. Dummy variables representing the
periods in the months when the two festivals took place (Cerkno – May; Novo mesto –
August) are introduced into the model. Ideally, a multi-equation model of impact on
tourism and employment would be estimated. Unfortunately, due to missing variables it
is many times impossible to estimate such a model. There typically is insufficient data on
crucial explanatory variables to allow estimation of even a single multivariate equation.
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As stated by Skinner (2006: 115) “the time series analysis provides a valid estimation
methodology applicable to this problem”. Wold’s theorem states that any stationary series
can be expressed as a self-deterministic component and a moving average of possibly
infinite order (Granger, 1989: 66, in: Skinner, 2006: 116). Thus, once the employment
series, or some appropriately differenced version of it, is shown to be stationary, Box-
Jenkins type time series modelling (see e.g. Box and Jenkins, 1970) can be used to extract
all of the systematic information from the series, leaving only a white noise residual.
Furthermore, as used in Srakar et al. (2016), interrupted time series analysis can be
fruitfully used to get insight into the dynamics of the net increments in tourism and
employment over the years.
The Box-Jenkins time series technique consists of identifying the process, estimating the
parameters of the process, and using diagnostic checks to determine if the residuals are
in fact white noise (see, for instance, Enders (1995)). A dummy variable representing the
month of the festival is added to the model and its effect measured. The described
procedure provides information on the number of tourist arrivals and overnight stays,
created by event’s performance.
However, there are some other factors besides the festivals that could have an effect on
tourism during the observed period, for example, seasonal factors and business cycles.
Therefore, a filtered model of Cerkno and Novo mesto tourism is estimated that exclude
connections with these factors. The variables used in the filtering process, for example,
dummy variables for quarters and data for a wider-region (used to proxy for the effects
of the business cycle), are described in Table 2.
Table 3: Description of variables included in the filtering process
Variable Description
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TA Monthly number of tourist arrivals for each of the two cities
TOS Monthly number of tourist overnight stays for each of the two cities
TAS Monthly number of tourist arrivals for Slovenia
TOSS Monthly number of tourist overnight stays for Slovenia
EMP Monthly number of employed persons for each of the two cities
EMPS Monthly number of employed persons for Slovenia
Q1 Dummy for the first quarter of the year
Q2 Dummy for the second quarter of the year
Q3 Dummy for the third quarter of the year
Q4 Dummy for the fourth quarter of the year
Source: Own elaboration.
The Equation 1 presents the Ordinary Least Squares (OLS) model for monthly filtered
number of tourist arrivals. The equations are similar for other dependent filtered variables.
The coefficients represent the average number of tourists, overnights or employed persons
for each quarter or season of the period. Variables for Slovenia are added to adjust for
cyclical effects. The OLS model’s residuals are Cerkno and Novo Mesto tourists,
overnights or number of employees, depending on the used dependent variable filtered to
seasonal and cyclical effects.
𝑇𝐴 = 𝛼𝑄1 + 𝛽𝑄2 + 𝛾𝑄3 + 𝛿𝑄4 + 𝜃𝑇𝐴𝑉 + 휀𝑡 (1)
To capture the systematic time relationship in the filtered dependent variables we perform
an interrupted time series analysis. The festivals occur at several points over the period
of the time series. Moreover, the study seeks to find out whether these events have any
effect on the economic measures during the events and directly after they occurred for
each respective month of the event. As the interrupted time series, in general, does not
require stationarity of the dependent variable of used in the original (filtered) series.
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The general form of interrupted time series’ regression model assumes the following form
(Simonton, 1977a, b; Huitema and McKean, 2000; Linden and Adams, 2011, quoted in
Srakar, Vecco and Slabe-Erker, 2016):
𝑇𝐴_𝑡 = 𝑏0 + 𝑏1𝑇 + 𝑏2𝑋_𝑡 + 𝑏3𝑋𝑇_𝑡 + 휀𝑡 (2)
Here TA_t is the aggregated outcome variable measured at each equally-spaced time-
point t, T is the time since the start of the study, X_t is a dummy (indicator) variable
representing the intervention (pre-intervention periods 0, otherwise 1), and XT_t is an
interaction term. The coefficients of interest will be 𝑏2 – the effects of interventions. It
is also expected that the interaction term XT_t will be insignificant denoting that the
effects of the festivals on tourism were only of short-term.
Finally, we perform a panel data analysis, using linear panel data models (fixed and
random effects). To this end, we estimate the following difference-in-differences (DID)
model:
𝑣𝑎𝑟𝑖,𝑗,𝑡 = 𝛽0 + 𝛽1𝑐𝑒𝑟𝑘𝑛𝑜𝑗,𝑡 + 𝛽2𝑛𝑜𝑣𝑜𝑚𝑒𝑠𝑡𝑜𝑗,𝑡 + 𝛾𝑧𝑖,𝑗,𝑡 + 𝛽3𝑚𝑗,𝑡 + 𝜔𝑗 + 휀𝑖,𝑗,𝑡
(3)
The treatment effect, namely, in this paper the occurrence of two festivals, in municipality
j at time t, is represented by the terms 𝑐𝑒𝑟𝑘𝑛𝑜𝑗,𝑡 and 𝑛𝑜𝑣𝑜𝑚𝑒𝑠𝑡𝑜𝑗,𝑡 the corresponding
coefficients β1 and β2 reflect the DID-estimator. Dependent variable 𝑣𝑎𝑟𝑖,𝑗,𝑡 simply
denotes the used tourism and employment variables. Vector 𝑧 captures municipality-level
determinants of an economic situation such as revenues of companies (in logarithms),
infrastructure and premature mortality. The term 𝑚𝑗,𝑡 captures GDP per capita on a
regional level as a macroeconomic control. Municipality fixed effects, 𝜔𝑗 take into
account unobserved time-invariant location factors. 휀𝑖,𝑗,𝑡 is the error term. As the
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treatment variable only varies at the municipality level, standard errors are clustered. The
regressions were estimated with random effects, as suggested by the results of the
Hausman test.
5. Results
This section firstly presents the results of interrupted time series analysis of tourism
variables for the festival Jazz Cerkno (Table 3). As it can be seen, the results of this
festival in terms of new tourism were more visible in earlier years (included in our
analysis), namely, in 2008, 2009 and 2010. Interestingly enough, the coefficients on
interactions with time are also significant which means that the effects were not only short
term, but significantly contributed to the tourism visits to Cerkno. We can estimate ca.
300-1,000 new visitors due to the festival at that time, of which ca. 200-600 were
foreigners. Also, we can estimate ca. 1,000-5,000 additional tourism overnight stays at
that time of which ca. 600-3,000 were by foreign tourists. Also, in 2014, an additional
positive impact can be seen in terms of 400 new visitors and 1,500 new overnights stays.
Again, this effect seemed to last for a longer time.
Table 4: Results of interrupted time series analysis, tourism, Jazz Cerkno
Tourist arrivals, total Tourist arrivals, foreign Tourist overnight stays,
total Tourist overnight stays,
foreign
Coef. t P>t Coef. t P>t Coef. t P>t Coef. t P>t
May 2008 998.29 7.00 *** 615.63 14.71 *** 4779.39 8.41 *** 3129.65 9.80 ***
May 08 × time 192.28 4.35 *** 114.13 9.31 *** 1229.90 6.96 *** 858.94 8.16 ***
May 2009 529.50 4.67 *** 325.08 7.80 *** 1774.64 4.55 *** 1192.78 6.63 ***
May 09 × time 16.22 0.88 13.84 2.27 ** 117.87 1.80 * 76.21 2.38 **
May 2010 297.21 2.79 *** 193.75 3.69 *** 879.13 2.33 ** 650.38 3.54 ***
May 10 × time 20.22 1.01 17.79 1.85 * 42.81 0.60 50.20 1.24
May 2011 41.57 0.32 -42.45 -0.65 100.65 0.23 -178.37 -0.66
May 11 × time 20.37 1.01 11.68 0.88 85.23 1.23 59.02 1.11
May 2012 73.86 0.48 0.91 0.01 183.01 0.30 -107.21 -0.32
May 12 × time 1.56 0.05 -8.02 -0.52 26.82 0.22 -12.93 -0.18
May 2013 -114.94 -0.49 63.87 0.68 -870.32 -0.89 -152.77 -0.33
18
May 13 × time -41.03 -1.69 * -23.92 -2.19 ** -160.13 -1.64 -84.23 -1.65
May 2014 399.97 3.74 *** 210.66 5.14 *** 1485.24 3.54 *** 730.59 4.70 ***
May 14 × time 42.45 3.75 *** 23.32 4.32 *** 118.01 2.71 *** 44.33 2.08 **
May 2015 83.2661 0.69 68.35 1.27 209.75 0.56 255.66 1.63
May 15 × time 3.49 0.20 0.97 0.10 62.15 1.07 29.07 1.09
Constant 554.01 5.76 *** 408.19 12.81 *** 4166.59 10.76 *** 3243.42 11.73 ***
Observations 100 100 99 100
F statistic 13.70*** 24.64*** 22.26*** 27.39***
Maximum lag 12 12 12 12 Note: Statistical significance: *** - 1%; ** - 5%; * - 10%.
Source: Own calculations.
Table 4 displas the results for Jazzinty festival in Novo Mesto. As in the previous analysis,
significant results can be mainly identified in years 2008, 2009 and 2010, being followed
later only in 2015. Although the numbers are on a significantly lower scale than those in
Cerkno, but they have grown by 2015. Approximately 100-200 new visitors have come
due to the festival of which more than 200 were foreigners. This apparent paradox can
clearly be explained by the effects of crowding out - apparently foreign visitors have
overcrowded the local inhabitants. A similar trend can be observed in the number of
overnight stays: approximately 1,000 new overnight stays, all foreign ones happened in
2008 and 2009 due to the festival.
In 2015, a significant rise in the number of new visitors and overnight stays can be
noticed: ca. 400 new visitors (only half foreign) and ca. 1,100 new overnight stays (half
of them foreign). Interestingly, again we can observe a crowding out effect visible in the
negative level of the coefficient on the interaction term.
Table 5: Results of interrupted time series analysis, tourism, Jazzinty Novo Mesto
Tourist arrivals, total Tourist arrivals, foreign Tourist overnight stays, total
Tourist overnight stays,
foreign
Coef. t P>t Coef. t P>t Coef. T P>t Coef. t P>t
May 2008 134.89 1.26 245.25 4.23 *** 903.66 2.76 *** 844.48 4.10 ***
May 08 × time -50.55 -2.72 *** -7.54 -0.56 -98.24 -1.64 ** -107.69 -2.97 ***
May 2009 196.33 1.82 * 253.03 3.07 *** 592.21 1.61 905.82 2.61 **
May 09 × time 29.48 1.40 16.84 1.48 30.78 0.41 1.67 0.03
May 2010 -11.87 -0.09 108.45 1.87 * 366.79 0.63 404.24 1.10
May 10 × time 37.75 2.71 *** 39.25 4.44 *** 94.79 1.62 121.35 2.87 ***
May 2011 -247.04 -2.23 ** -252.97 -5.01 *** -483.36 -0.95 -584.51 -2.56 **
19
May 11 × time -61.29 -5.64 *** -14.87 -2.18 ** -51.00 -1.02 20.71 0.85
May 2012 187.86 2.16 ** 61.04 0.79 689.61 2.27 ** 253.72 1.18
May 12 × time 7.72 0.40 -12.09 -0.83 -32.37 -0.62 -39.10 -1.24
May 2013 176.25 1.36 149.29 1.28 795.62 3.00 *** 468.98 2.31 **
May 13 × time -20.38 -1.49 -28.38 -2.33 ** -106.00 -3.29 *** -138.70 -5.39 ***
May 2014 152.63 1.63 24.18 0.38 152.92 0.54 -113.03 -0.50
May 14 × time 56.16 3.37 *** 45.40 4.17 *** 158.01 2.92 *** 143.52 3.41 ***
May 2015 402.299 6.49 *** 212.57 4.44 *** 1100.21 4.44 *** 602.82 2.75 ***
May 15 × time -76.61 -8.84 *** -51.19 -6.32 *** -156.02 -4.18 *** -108.49 -2.99 ***
Constant 77.07 1.29 257.60 6.53 *** -128.01 -0.60 -52.17 -0.90
Observations 100 100 100 100
F statistic 43.75*** 48.01*** 18.90*** 30.10***
Maximum lag 12 12 12 12 Note: Statistical significance: *** - 1%; ** - 5%; * - 10%.
Source: Own calculations.
Table 5 presents the results for the employment variables for both festivals. Similarly as
earlier identified, the main effects can be observed for both festivals in years 2008, 2009
and 2010. Later, even negative effects can be noticed, probably to be attributed to some
external factors like the financial crisis (although we control for cyclical effects in the
starting OLS regression). Then as well/similarly, for Cerkno we are able to find strong
positive effects in the year 2014.
Table 6: Results of interrupted time series analysis, employment, both festivals
Nr of employed, Cerkno Nr of employed, Novo mesto
Coef. t P>t Coef. t P>t
May 2008 -17.41 -2.31 ** -194.71 -4.37 ***
May 08 × time -1.27 -0.92 -57.82 -8.51 ***
May 2009 40.70 3.35 *** 219.32 4.21 ***
May 09 × time 9.48 7.29 *** 36.04 4.93 ***
May 2010 23.55 3.10 *** -40.03 -1.36
May 10 × time 7.35 4.00 *** 6.13 1.09
May 2011 -37.74 -4.81 *** -70.78 -1.69 *
May 11 × time -10.97 -7.83 *** -84.13 -20.20 ***
May 2012 -5.60 -1.02 90.71 2.63 ***
May 12 × time 5.24 5.21 *** 53.61 13.81 ***
May 2013 -31.25 -4.55 *** -21.91 -0.53
May 13 × time -4.05 -4.51 *** 19.57 4.60 ***
May 2014 15.89 3.14 *** 1.35 0.04
May 14 × time -0.54 -0.67 35.23 8.15 ***
May 2015 -39.58804 -4.84 *** -104.86 -8.09 ***
May 15 × time -1.77 -1.86 * -14.95 -9.13 ***
Constant 87.74 179.63 *** -234.36 -20.96 ***
Observations 100 100
20
F statistic 1161.12*** 1294.82***
Maximum lag 12 12 Note: Statistical significance: *** - 1%; ** - 5%; * - 10%.
Source: Own calculations.
Finally, as a robustness test, we present the results of the panel data analysis. Here, the
effects of both festivals are negligible, if any. This might be attributed to several causes
a) a general perspective not taking into account the different effects (positive and
negative) over the studied period; b) the effect of different confounders, including the
regional effects; c) different type of estimator and used comparison across all the
Slovenian municipalities.
Table 7: Results of panel data analysis, random effects models, both festivals
Tourism arrivals Tourism overnight stays Nr of employed
Coef. t P>t Coef. t P>t Coef. t P>t
Jazz Cerkno -62.63 -0.06 -613.36 -0.19 13.14 0.07
Jazzinty NM 1821.07 1.67 * 5374.38 1.63 -10.30 -0.05
LogIncomes 319.75 2.87 *** 1170.65 3.50 *** 131.55 11.38 ***
GrossWages -2.35 -4.63 *** -5.81 -3.79 *** -0.37 -7.60 ***
TimeTrend 14.76 6.39 *** 36.85 5.27 *** -4.97 -21.24 ***
Weather 0.02 1.17 0.06 1.27 0.00 0.11
GDP 0.11 1.38 0.39 1.62 0.07 7.77 ***
Mortality 1.92 0.36 6.99 0.44 -0.02 -0.03
Infrastructure -0.01 -0.53 -0.03 -0.56 0.02 1.47
Constant 2223.33 0.95 3187.07 0.48 4879.23 0.90
Regional
effects Yes Yes Yes
Observations 6617 6617 14997
Groups 124 124 211
Wald chi2 63.14*** 52.43*** 1674.87 R square overall 0.0620 0.0717 0.0332
Note: Statistical significance: *** - 1%; ** - 5%; * - 10%.
Source: Own calculations.
6. Discussion and Conclusion
This paper has examined the economic impact of two Slovenian jazz festivals to make a
positive contribution to sustainable local economic development in 2008-2015. We found
21
evidence for the effect on both tourism and employment in both cities/towns, but found a
wide variety of results over the studied years. It is clear that the festivals are reflected in
the growth in the number of tourism and employment, thus they contribute to the
sustainability of the local economy but this can be attributed to numerous reasons. Let’s
shortly discuss some of them.
Firstly, the results show an increase in both tourism and employment in the starting years
in both jazz festivals, with significantly larger numbers for Jazz Cerkno. The latter has
established itself as a “proper” jazz festival, taking place since the middle of ’90s and
attracting a regular group of contributors and visitors. Clearly, the economic crisis had its
effect even beyond the mere cyclical effects on the level of Slovenia – we could claim it
had an influence on both cities in a stronger manner than for the general country.
Moreover, the competition of different new festivals (jazz – see Table 1; and of other
musical genres) has surely contributed to the dissipation of the usual visitors and their
decay in interest. Jazz Cerkno was in that time already not so new and it is possible that
it suffered a crisis of identity in the latter years due to change of its management.
Furthermore, both festivals can be classified as “home-grown” festivals (See Table 1),
being more attractive to home than to foreign visitors - the latter forming a large part of
the impact of the Jazz Cerkno festival in the earlier years while decaying latter.
Finally, Jazzinty Novo Mesto consists of several events, not necessarily being focused on
the jazz festival performances but including a composition award and workshops, where
the latter form the key part of the event since its start. It is therefore to no surprise that
the effects of the Novo Mesto festivals are even less visible in the number of new tourists
and employment spaces.
Lastly: may we claim an evidence of the effects of the two “home-grown” festivals on
the resilience of the two host towns? From the results of our analysis, the evidence is
22
unfortunately not so uniform. We clearly see an additional level of new tourists and, as a
consequence, new employment spaces, in particular in the early years of the festivals.
This can surely be seen as a stimulus to local growth and, by this, to the resilience and
welfare of the two towns, in particular in the economic sense. Furthermore, the economic
effects were apparently on a timely basis, as evidenced by the coefficients on the
interaction variables: they didn’t persist only in the month of the festival, but were more
evenly spread across the year.
However, on the other hand, the times of the financial crisis saw those effects significantly
lessened if not disappeared. This may raise some suspicion into the sustainability of the
effects, but it is mainly logical/understandable/explicable due to the “home-grown”
nature of the two festivals. It is clear that the festivals contribute not just to the economic
effects but to the social, environmental, cultural and spiritual value and identity of the
towns. It would be interesting, therefore, to perform also studies following the contingent
valuation methodology and qualitative studies using Delphi technique focusing on the
concept of community sustainability through cultural events, to corroborate our findings
and speculations in the future. Only then we would be really able to comprehensively and
holistically assess the value and the impact of the two festivals.
Nevertheless, this article used a novel methodology in cultural economics, developing
only in the past year with few studies. It presented results which both confirm the
importance of the method as well as show its drawbacks. It would be very important to
use this methodology notably more in future, as it promises to overcome the significant
(inherent) methodological problems of both the economic impact studies and contingent
valuation (Srakar, Vecco 2016). We hope this article would provide another step in this
research direction.
23
This study also presents some additional limitations. As stated, the importance of
acknowledging jazz festivals’ impacts is well documented in the literature. Nonetheless
evaluative research has, until very recently, adopted predominantly the economic impact
approach. This is despite a growing awareness of the potential limitations of results
attained from the application of economic models alone (Burgan & Mules, 2000; Carlsen
et al 2007) and the growing pressure on public authorities and cultural festival organisers
to account for the benefits and costs of organising these events in terms of social policy
and public funding (Carlsen et al., 2007; Small et al., 2005). Future studies on jazz
festivals have to combine the analysis of social and economic effects to develop a more
holistic “picture” of the festival capacity.
In all two cases there were indications that the festivals, at least indirectly, were helping
some local firms grow and prosper. The jazz festivals supported the local business
development. However, this research did not uncover examples of direct festival
involvement in the encouragement of social entrepreneurs, community businesses, or
enterprises and co-operatives, volunteers which generate jobs, income and meet wider
social and environmental objectives.
The economic impact of a festival on the host society goes beyond the organised activity
(Hiller, 1995). Future research could further explore the social economic impact of jazz
festivals, first at country level and then across Europe, and the impact of the festivals
from visitor perspective and visitor expenditures during the festivals, as well as
relationship between the communities and the destination management aspects.
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