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Journal of Cultural Heritage 10 (2009) 1e8

Original article

Economic impacts of cultural heritage e Research and perspectives

Einar Bowitz*, Karin Ibenholt

Econ Poyry, P.O. Box 5, N-0051 Oslo, Norway

Received 9 January 2007; accepted 15 September 2008

Abstract

Investment in cultural heritage (and other forms of culture) are often claimed to be beneficial for a local economy, not only in terms ofcultural consumption, but also in the form of increased employment and income. This article addresses some methodological questions regardingeconomic impact studies of investments in cultural heritage projects. Different types of direct and indirect impacts are being discussed,especially how these can be calculated. We also give a short overview over some studies of economic impact of different cultural and/or tourismactivities, and the pros and cons of these studies. In a study of the Norwegian town of Røros, we find that tourism related to the cultural heritagesin the region contribute some 7 per cent to overall employment and income.� 2008 Elsevier Masson SAS. All rights reserved.

Keywords: Economic impact; Inputeoutput; Tourism; Local economy; Culture

1. Research aims

This article is the first delivery in a large research project‘‘Cultural heritages and value creation. Estimating economiceffects of cultural heritage in the city of Røros’’ conducted byEcon Poyry and the Norwegian Institute for Cultural HeritageResearch, NIKU. The project is financed by the ResearchCouncil of Norway [1].

The overall objective of the research project is to estimateeconomic effects of cultural heritage in Røros, which isincluded on the UNESCO World Heritage List. The towncentre consists of well-preserved timber houses. Røros reliedfor centuries on copper mining, but other industry and tertiarysectors are now the basis for the community. Other objectivesof the project include revealing how management of culturalheritage can affect economic value, and exploring the inherentconflicts between value creation and conservation of culturalheritage. The study aims to increase the knowledge about thepossibilities and limitations in the management strategy‘‘conservation through use’’ to support a common

* Corresponding author. Tel.: þ47 45 40 50 00; fax: þ47 22 42 00 40.

E-mail addresses: einar.bowitz@poyry.com (E. Bowitz), karin.ibenholt@

poyry.com (K. Ibenholt).

1296-2074/$ - see front matter � 2008 Elsevier Masson SAS. All rights reserved.

doi:10.1016/j.culher.2008.09.002

understanding among local actors of the action space for useand management of cultural heritage.

The objective of the present paper is to present results fromone of the working packages, with the aim to establisha theoretical framework for the project and to elaboratea theoretical model to be used to estimate economic values. Asummary of empirical findings are also presented.

2. Introduction

There is an increasing political focus on cultural heritage,both because of higher public interest in heritage per se andbecause many see heritage as a means to stimulate economicactivity in regions with economic problems. Tourists areincreasingly demanding cultural experiences of various sorts.Cultural heritage, both isolated monuments and historicalquarters or city centres also serve to attract tourists to variousdestinations. Moreover, local initiatives such as festivals,concerts and amusement parks are mushrooming and can helpattract tourists to the community. Also natural heritage is beingutilised for economic purposes through ‘‘eco-tourism’’ and thelike.

Economists approach the value of culture from (at least)two different angles: First, economists try to estimate the value

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of various aspects of culture, e.g. an opera, an art museum ora well-preserved middle-age city centre. These are goods thatare not traded in an ordinary market, i.e. there exists no marketprice for them. And should a market price exist it wouldprobably not be equal to the ‘‘true’’ societal value, sincecultural goods also can be characterised as public goods and/oras having external effects. Similar to economists’ estimates ofthe value of unspoilt nature, economists use surveys or othermethods to estimate the population’s willingness to pay forcultural events, monuments or buildings.

Another approach for economists is asking the question:What is the positive effect for the local economy (jobs, reve-nues) from investing in culture, such as festivals, upgradingold houses or building a new museum? The problem here isnot to estimate the ‘‘true value’’ of culture, but to estimatepotential spillovers in the local economy from investing inculture. It is the latter effects of culture (more particularlycultural heritage) that is the topic of this survey.

Policy-makers increasingly seem to demand estimates ofthe effects on the local or regional economy of investing inculture. If local economic effects of investing in culture arehigh, cultural investments could support, or even substitute for,more traditional projects or policies for promoting regionaldevelopment. Large economic effects of culture might also bean additional argument in favour of using resources on cultureprojects, in addition to the utility of ‘‘pure’’ cultural value.

Many studies suggest economic effects of culture on theregional economy, both in terms of generated revenues andemployment effects, which for an economist seem to begrossly exaggerated. E.g. a recent Norwegian white paper oncultural heritage policy [2] claims that ‘‘for each krone publicinvestment in maintenance and rehabilitation of culturallyvaluable buildings, society receives 10 kroner in return’’, and‘‘Each workplace directly attached to the cultural heritagesector creates on average 26.7 associated jobs. ‘‘The effectsare undoubtedly high, in addition to the fact it seems unclearwhat the expressions in the text really mean.

Both in Norway and internationally one can identify studiesthat seem to be rather quick appraisals that often produce(unrealistic) large effects. On the background both on theestimates in some studies and on how the results have beenused in public discourse, the studies and their use have beenfiercely criticised, see for instance Refs. [3e6]. This hasthreatened to cast the entire field of analysing the economiceffects of using the public purse to stimulate culture (includingcultural heritage) into disrepute. But there is also a group ofmore rigorous studies with more realistic estimates of regionaleconomic effects.

Our view is that because some previous analyses may havehad low quality and have been subject to misuse in the publicdebate, there is still a need for sober analysis of the topic. Theeffects of investing in culture are diverse and vary by site,project and over time. In our opinion there is a need for a clearview of the total economic impacts of investing in culture,spanning from ticket sales and the like, to the more long termeffects that may arise from culture such as migration decisionsor the society’s ability to innovate.

3. Economic impacts of cultural heritage projects

All investment projects have some form of economic impacton society. The magnitude of these impacts will vary dependingon several factors, like for instance the type of project and whereit is being launched. In this chapter we will discuss the differentchannels through which the investment affects society, the useand misuse of economic impact studies of culture-relatedinvestment projects, and which channels or factors we believeare important when investigating a place like Røros.

There are several channels through which an investment canaffect the local economy. Different researchers focus ondifferent channels, and the boundaries between different chan-nels are not always clearcut. Analyses of local economic effectsof projects have been done especially for assessing the effects ofusing state funds for supporting industry in declining regions.The ‘‘economic base model’’ has been the basis for such studies.This model distinguishes between base industries, that generaterevenues from outside the region through regional export ofgoods, and other industries that mainly sell their products insidethe region, and hence do not generate ‘‘new’’ revenues. Theeconomic effects of investing in base industries are twofold.First, employment in the base industries is generated andsecond, increased employment and revenues are generated fromlarger domestic deliveries to the base industry. Such analyseshave been made for investment in different industrial projects orsectors, for the ‘‘effects of tourism’’ and for calculating ‘‘theeffects of’’ the cultural sector in a local economy.

Within the framework of economic impact analysis one cansay that a prerequisite for an investment having a net positiveeffect for a local economy is that it stimulates base industries.These industries mainly sell their products outside the localeconomy or sell products to the community that otherwisewould have been imported. This will raise exports or reduceimports to the region, thus stimulating the local economy.Supporting an industry that only addresses the local marketwill only result in a redistribution of income, but not bring inany new income to the economy.

The effects are diverse, they can be measured in differentways, and be assessed with different degree of difficulty. Inaddition, when analysing effects of cultural heritage or otherprojects, it is important, but difficult, to define ‘‘effect of what’’.One most also assess which base industries that are beingaffected by the cultural heritage, and here tourism is of particularinterest. To be useful for decision makers, the ‘‘effect of’’ shouldbe associated with a decision or an investment project.

We propose below a classification of effects that may ormay not be important in investment projects. The fact thatearlier analyses have included these effects to a differentdegree, is an important source for the variety in results.

The effects of investment in culture can be classified asdirect and indirect effects.

3.1. Direct effects

The direct effect of the project is economic impacts fromthe project itself. For instance, increased capacity or quality in

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a museum financed by the state, will usually be associatedwith more jobs in the museum. The effects may be measuredas higher employment in the museum. Another approachwould be to measure the effect of the support given from thecentral authorities and from higher entrance fees from externalvisitors. This second approach illustrates that the limitation ofthe economy that we assess the effects on, is important. Statesupport can be counted as a positive impact on the localeconomy, but for a larger region or the whole country this is ofcourse not so since the subsidy is only a redistribution ofresources.1 In the case of local public subsidies, an increasedsubsidy to the museum will take place at the expense of othermunicipal demand, and thus should not be counted as a directeffect.

One should keep in mind that the support given to theproject could have been given to any other project, and thatsome of these projects could have generated larger effects forthe community. It is also important that the income fromincreased entrance fees and the like only should include feesfrom visitors from outside the region. Increased demand fromthe region will usually take place at the expense of other localspending. In some cases the project will reduce the propensityof local residents to travel outside the region for culturalexperiences, and if that is the case, increased demand fromlocal residents should also be accounted as an effect of theproject. For instance, one might imagine that support fora local theatre would make it less attractive to travel to a largercity for seeing theatre performances. Increased local spendingshould only be included if one can justify that this spendingotherwise would have been made outside the community.

The direct effects may be measured in sales, value added orin employment (number of persons or in full-time equiva-lents). Sales numbers tend to be inflated and often hard tointerpret. Usually they are large in relation to the localeconomy, and thus are often (mis)used in public debate. Valueadded or revenues are more ‘tangible’ variables, as well are thenumber of employed persons or man-years. Especially insectors where intermediate inputs are large (such as retailtrade), effects measured in sales are often of little meaning forthe magnitude of effects.

3.2. Indirect effects

Various types of indirect effects of projects have beenassessed and analysed in regional economic analyses ofculture and other projects. These may be classified and definedin various ways; we use the classification in Ref. [3].

3.2.1. Inputeoutput effectsThe project needs intermediate inputs, such as energy,

transport, food, maintenance etc. These deliveries must partlybe imported from outside the region, but can to some extent bemet from the local economy. Inputeoutput effects are

1 State support can be justified as an expression of the willingness to pay for

conservation of cultural heritage, and hence not necessarily be regarded as an

redistribution of income or spending.

deliveries of goods and services from the local community tothe project.

This demand increases production elsewhere in the localeconomy. It is important that only local deliveries are included.Increased production in other industries will in turn spur demandfor inputs to these industries, and hence we have a long, butdiminishing ‘‘line’’ of demand increases. By using an inputeoutput model one can estimate the total effects, but this impliesthat one has information about the deliveries of input factors inrelation to production for all the affected industries.

When calculating inputeoutput effects one also must considerthe utilization of the existing capacity, if there already is fullutilization then there will be no inputeoutput effects, at least notin a short time perspective, since the demand increase only willdisplace other production. But if there are idle resources in thelocal economy the inputeoutput effect will exist.

3.2.2. Multiplier effectsHigher local revenues result in increased demand. Parts of

this local demand are directed at local goods and services, andin turn give rise to higher revenues in firms that supply thesehigher local deliveries. This effect is also called the Keynesianeffect.

3.2.3. Acceleration effectsIn the investment phase, parts of the deliveries are from

local suppliers. These increased deliveries in turn give rise toinputeoutput and income multiplier effects. The accelerationeffects will be short-term, since they are present only in theinvestment phase.

3.2.4. Ancillary spendingVisitors to a cultural heritage site (or tourists arriving of

other reasons) will spend resources in the region on food, retailgoods, accommodation and the like, so-called ancillaryspending. This will increase the income for firms in thesesectors. This increase will in turn give higher inputs, higheremployment and higher revenues. In turn they will give rise to‘‘second order’’ multiplier and inputeoutput effects. A centralquestion here is whether all ancillary spending are additionaland attributable to the site.

The degree to which ancillary spending gives rise to higheremployment or investment, will depend on the utilization ofexisting capacity in relation to the magnitude of the rise indemand caused by the project.

3.2.5. Derived effectsAn investment strategy for tourism may have derived

effects, where it can be argued that the investment strategy tosome extent is a cause. At Røros, for example, there are atleast three large popular culture/art festivals2 that attractvisitors from outside the region; many from the regional

2 Rørosmartnan is a popular culture and trade fair, Vinterfestspillene (a

chamber music festival) has a larger ‘‘fine art’’ component and ‘‘Det brinner en

eld’’ (There’s a fire burning) is a biennial outdoor theatre show.

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capital of Trondheim. It could be argued that these festivals tosome extent are caused by the cultural heritage image ofRøros. Many of the same people that were active in theheritage rehabilitation efforts have been active in establishingthe cultural festivals as well. Exactly what fraction of theregional impacts of these festivals that could be attributed tothe heritage investment strategy at Røros is certainly subject todiscussion, but zero is probably a bad estimate.

Increased exports of products that are closely related to thesite e like local food and craft, might also be a consequence ofthe culture investment. The effect can be measured by theamount of money tourists spend locally.

In Røros there is an additional derived effect through theexport of craftsmen skilled in preservation techniques.Through the rehabilitation process local craftsmen have beentrained and gained experience in traditional building tech-niques and the like, and today some of these are being‘‘exported’’ to other sites or regions to assist in rehabilitationprojects or educate other craftsmen. This is a derived effectthat is more or less fully attributable to the heritage strategy.

3.2.6. GravitationInvesting in culture may give rise to what has been termed

gravitation effects. Such effects are processes that make theregion more attractive to live in or to establish firms in, orprocesses that help foster entrepreneurship and innovation,which may result in increased employment and income in thefuture. The effects are slow to emerge and take time to unfold.

Investing in culture may make it more attractive to live inthe region, and thus affect migration to and from the region. Inparticular it might be important if culture attracted entrepre-neurial people with higher education, who could play a role indeveloping the society. Other effects could be that culturalinvestments would increase awareness of the region and makeit more attractive to invest in. If culture helped to establish theregion with a positive image, culture might be used inbranding and as a marketing tool.

Thus, gravitation is associated with migration, with firmlocalization and with branding and marketing. As mentioned,the effects are long term, and often hard to estimate withprecision. These factors have seldom been included in impactanalyses. Our project at Røros will explicitly deal with thisissue and shed some light on the magnitude of this effect.

Even though one might assess the effect of ‘‘culture’’ onmigration, it is difficult to assess the effect of one particularproject. In the case of Røros, the entire strategy of heritagepreservation is the object under study, and is thus quite wellsuited as object for analysis.

The magnitude of these, both direct and indirect, effectsdepend on how the study is delimited geographically e and ingeneral the larger the area, the smaller are the effects.

3.2.7. ‘‘Non-economic’’ effectsOther effects that are not necessarily measurable in money

value, are positive effects due to stronger identity for inhabitants.A stronger identity may not be a target or asset per se, butperhaps only to the extent that it can raise revenues or

employment in the region. Identity may also appear in varioussorts, and for instance differ with respect to innovativeness ortowards entrepreneurial initiatives. A strategy based on culturalheritage would almost by definition be expected to fostera traditional identity, which might not be particularly fruitful toentrepreneurial activity. One of the challenges in using culturefor economic means would be to combine a strong feeling forcultural heritage with an entrepreneurial spirit.

3.2.8. Counteracting effectsAn analysis of economic impacts of cultural heritage or

other investment projects or strategies, must at least considerthe importance of possible costs to the local economy that arenot internalised in the project. Three factors are oftenmentioned:

� Displacement effects� Wear and tear caused by tourists or visitors to the site� The need for increased infrastructure investments

The displacement effects may be the most important ones.They are of different sorts. First, it might be so-called productmarket displacement, see Ref. [4]. This refers for example tothe fact that tourists that otherwise would have been at the sitein the absence of the project, are ‘‘crowded out’’ becausehotels are full or the like. This effect has been assessed inanalyses of music festivals, with a large number of visitors ina short time [7]. A proper analysis requires that one assess themagnitude of this effect.

Impact analyses are often ‘‘demand-driven’’, i.e. assumingthat changes in demand are accommodated by an equally largeincrease in supply. In regions with unemployment and sparecapacity, this is a reasonable assumption. In Røros, it isprobably justified to assume few or none labour marketinduced displacement, also because reduced net migration outof the region can be expected in a more long term perspective.In a region with low unemployment, a culture project willraise labour demand. That might either increase wages so thatemployment elsewhere in the local economy would decline, orit would stimulate migration to the region. Regions with lowunemployment are usually larger cities with net immigration,and a culture investment project might thus exacerbateregional imbalances. Displacement could also happen throughproperty markets. If a culture project occupies an attractivearea, and other firms’ profitability is reduced because of that,there will be a displacement effect. In cultural heritage policy,it is probably of importance to check if this could be animportant cost to the local economy of investing in a particularheritage project.

Wear and tear may negatively affect the heritage itself,which would threaten the sustainability of combining tourismand preservation. The magnitude of the wear and tear effectcould be estimated as a first approximation with the costs ofcorrective measures such as increased rehabilitation or main-tenance costs.

Finally, investing in culture and tourism may raise infra-structure costs. A substantial increase in tourism as

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a consequence of a cultural heritage investment strategy maygive rise to increased demand for services that is usuallyprovided by the authorities, free of charge. Examples may beroads, parking houses and the like. Need for more staff at thetourist office is another example of higher costs for the localpublic authorities that are caused by the project, but on theother hand this can be counted as a positive employmenteffect.

An often encountered problem in impact studies is one ofcomplexity. If the region has many attractions, it will bedifficult for tourists to say whether they visit the place becauseof this or that attraction; it is the package of attractions that isimportant. It is thus preferable to analyse a community wherethe cultural heritage is the only attraction and more or less theonly reason why tourists visit the place. Røros is such a place.

4. Quantitative studies

4.1. Introduction

The type of culture of which effects are measured, and thetype of local economy that the effects apply to, vary amongstudies. Thus transferability of the results to other sites isa problem. Many studies analyse ‘‘impact of tourism’’ onrelatively small regional economies (e.g. [8,9]). Effects areoften measured in employment and value added, butfrequently effects are also measured in sales. Thus, it is nota particular investment project or investment strategy that isthe object of analysis, but rather ‘‘what would have happenedif the tourists had not come to the region’’. Such analysesseldom ask whether local labour and capital that are attributedto tourism would have been utilised elsewhere in the economyin the absence of the ‘‘prime mover’’, in these cases the touristindustry. This will tend to overstate the effects, or at least tomake a meaningful discussion based on the results difficult.

Effects of ‘‘the arts’’ range from analysing the effect of rockconcerts [10] to museums in larger urban agglomerations [11].The Guggenheim Museum in Bilbao, Spain regularly under-takes impact analyses of the effects of the museum on the localeconomy. The diversity of analyses illustrates that both char-acteristics of the site and of the culture project impacts thelocal economy, are very different in the analyses that havebeen made.

4.2. Economic impact analyses

Like ‘‘the arts’’ cultural heritage projects have been ana-lysed in order to assess the regional economic impacts. Thescope and quality of studies dealing with cultural heritagehave varied, just like the earlier mentioned studies of culturalprojects. Some studies have produced large impacts, but havealso received strong criticism on methodological grounds. Itseems that the popularity of such studies internationally iswaning; see Refs. [6,12]. The low quality of some studies mayhave threatened to destroy meaningful discourse over the issueof economic effects from cultural heritage investments, assome reported effects seem enormously out of proportion with

any reasonable assessment. van Puffelen seems so disillu-sioned of the use of impact studies, that he recommends suchstudies not be made [6]. We agree with Ringstad who arguesthat badly performed and presented studies of economicimpacts of art and cultural heritage should not be used asarguments against well performed studies [3].

Strauss and Lord calculate regional economic effects ofincreased tourism following from investment in 13 heritagesites in Pennsylvania, USA [13]. The analysis quantifieseffects on local economy revenues in the investment phase anddirect and indirect revenues from increased tourism. Regionaleconomic multipliers are calculated with an inputeoutputmodel, based on data from tourist surveys. According to thearticle, an investment of 88 million USD resulted in a 289million USD gain through tourist-related impacts during a 13year period, in the form of direct impacts of 169 million andindirect impacts of 121 million USD.

There are two important problems with this analysis. First,all increases in the number of tourists since a reference yearare attributed to the investment. In a situation of increasingoverall economic activity in the US, one might expect anincrease in the number of tourists even in the absence of theseinvestments. This tends to overstate the effects. Second, allimpacts are measured by sales and not in increased valueadded or employment, which also tends to overstate theeffects.

Similar problems are present with analyses of tourism inNorway as well. Based on tourist surveys and regional inputeoutput models, Dybedal has analysed regional economic‘‘effects of tourism’’ in Norwegian counties [8,9]. Based onregional national accounts data for tourism, a regional inputeoutput model is used to assess the effects of removing thisdemand component. The model accounts for differences in thecounties’ import shares of different goods and services. It doesnot account for direct and indirect investment deliveries. Aresult from these studies is that indirect effects at county levelis of an order of magnitude of 30e40 per cent of the directimpacts, measured in sales. This equals an income multiplierat the county level of 1.3e1.4.

In Norway there have been undertaken few studies of thelocal economic effects of cultural festivals. Ericsson andVaagland assess effects on the local economy of culturalfestivals in Lillehammer [14], a city with 25 000 inhabitants.Ericsson and Vaagland have utilised a survey among atten-dants, asking whether they live in the region and the amount ofspending during the festival. Inputeoutput and incomemultipliers were calculated ‘‘ad hoc’’ without a formalregional economic model. There were around 5000 attendants,with only 200 travelling from outside the region in order toparticipate at the festivals. Because most of the attendantswere from the community, the regional multiplier was small;local economic effects (turnover) is estimated at 1.5 millionNOK. No results are calculated for value added or employ-ment, but the effects are probably also very small compared tothe size of the local economy.

Spilling calculates effects on the local economy of a musicfestival in the city of Notodden, Norway [15]. He assesses

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‘‘first round’’ effects on sales in the local economy based oninterviews, accounts and a survey among festival attendants.No indirect multiplier or inputeoutput effects are calculated.

Hervik et al. analyses effects on the regional economy ofculture festivals in ‘‘Møre og Romsdal’’, a county in WesternNorway [7]. Based on assessments of local input coefficients,they estimate direct and indirect effect of the festivals. Theyestimate multiplier effects of personnel costs, effects ofpurchases of goods and services (inputeoutput effects) andincreased local demand from increased number of attendantsfrom outside the region, as well as increased domesticdemand (and reduced imports) from the local population.The share of attendants from outside the region is estimatedfrom ticket sales, and amounts spent on accommodation andother purchases are also estimated by the authors, based onaccounts and interviews. No surveys were undertaken. Theyassume that 20 per cent of sales are profits and 30 per centare wages (both are local revenues). The rest are purchasesof goods and services, of which a fraction is imported. Theeffects are calculated for the county. Total effects of MoldeJazz festival were calculated at 85 million NOK, while totalrevenues of the festival were estimated at 17 million NOK.Indirect value added effects caused by visitors from outsidethe region was estimated at 16 million NOK, i.e. of the sameorder of magnitude as the total festival revenues. The authorsbelieve that smaller festivals, which to a larger extent attracta local audience, will have far less positive effect on thelocal economy. The report also contains a sponsor surveywhere respondents assess the effects on local identity and theregion’s attractiveness as a lively region. Sponsors’ did notthink their direct profitability increased much during thefestival, but thought that the festival strengthens localidentity.

According to Ashworth and Tunbridge, historic urbantourism is usually organised in a grid of historical towns, or asa centre for regional tourism [16]. They say that a key questionin assessing the economic impacts is whether increasedcultural tourism requires additional infrastructure investment,which do not in themselves generate revenues. If that is thecase, it should be included on the cost side in the calculations.The need for the local public sector to finance and undertakeinvestments in order to support heritage-based tourism has notbeen addressed explicitly in the studies reported in this survey.

Flognfeldt states that most visitors to small places are ona round trip, where they usually stay at a new place everynight [17]. Therefore most visits on activities take place duringthe day. That makes it difficult to use hotel statistics to assessthe number of people participating on day activities.

Bille Hansen, Cristoffersen and Wanhill illustrate theimportance of taking account of investment resources’ alter-native use, and of attracting out-of-region visitors [5]. Theycompare two cultural heritage projects in the Danish county ofFunen. The first project was upgrading an old textile factory tocontain an art gallery, a museum for graphic art and thenational press museum. The other project was a museum in thehome of 19-century fairy tale writer Hans Christian Andersen(‘‘H. C. Andersen house’’).

Both projects were compared with an average governmentproject of the same magnitude as the project under consider-ation, and the regional economic consequences were estimatedwith a regional inputeoutput model. According to the anal-ysis, the textile factory project increased employment in thecounty of Funen with 50 full-time equivalents. However, ifgovernment consumption and investment in general wereincreased with the same magnitude as the textile project, theincrease in employment in the county would be 49, i.e. prac-tically the same as in the culture project. The HC Andersenhouse project was much smaller. However, it was estimatedthat the project raised employment in the county by 27 full-time equivalents. The increase in employment of the averagegovernment project of the same size as H. C. Andersen housewas only 3 full-time equivalents, however. Thus, per krone ofincreased public expenditure, the impact on the local economyof the HC Andersen house was much larger than the effect ofthe textile factory project.

The reason for the difference was that the textile factoryproject largely catered for the population in the county, whilethe HC Andersen house attracted many visitors from outsidethe region, thus producing increased ‘‘export’’ revenues.

The results point to an important aspect of culture as localeconomic engine; the attraction must be large or interestingenough to attract visitors from outside the region if positiveregional economic impacts are to be expected.

4.3. Migration

There is little empirical research on the importance ofculture for migration. Rubenowitz and Rubenowitz have ana-lysed the importance of a varied cultural scene in a communityfor migration motives in Sweden [18]. Inhabitants were askedabout the importance of various factors for where they wantedto live. To be near family and work were (of course) mostimportant, as well as leisure possibilities. Around 30 per centanswer that cultural activities are important. Design and typesof answer question the degree of validity of the analysis for theimportance of cultural heritage for migration.

Wikhall analyses whether culture affects migration deci-sions, based on a survey towards groups of highly educatedpeople in Sweden (the groups believed to be the mostgeographically mobile) [19]. The respondents were askedwhat would be most important for determining place oflocation assumed they were to move to another municipality.Wikhall concludes that although labour market variables maybe gradually less important for choice of region, these factorsstill are very important. She finds that a well developedcultural infrastructure is important for many, but whether thisincludes cultural heritage is not discussed. Probably otheraspects of culture dominate, but these variables can be verycase-specific. The relevance for cultural heritage or formethods may not be so great.

Garvill et al. analyse migration motives, but do notexplicitly address culture as migration motive [20]. They findthat job possibilities become less important as motive formigration over time, and that education becomes more

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important. Whether place characteristics such as culture, builtenvironment and the like e perhaps through strengthenedplace identity e have an importance for migration, is notanalysed.

5. Qualitative studies

The increasing interest in utilising the pure economicbenefits of heritage, have spurred numerous reports on cultureas a driver in the local economy, with special emphasis oncultural heritage. In Norway and especially in Sweden, bothcentral and local heritage authorities have published severalreports on the topic ‘‘cultural heritage and regional economy’’,see for instance Refs. [21e23]. The reports are often theo-retical discussions of the type of effects that could be expectedfrom investing in culture, in some cases based on case studiese ‘‘good examples’’ of local initiatives. Few of the studiesassess the economic effects of the investments. The reports areusually made by representatives from the ‘‘cultural heritagesector’’. Some reports discuss integrating culture in regionalpartnerships, a policy framework that is increasingly popularin the EU, and also in Norway.

A paper by Weissglass et al. seems to give a representativecomprehensive overview of research and analyses of theSwedish heritage sector [24]. It puts on a broad perspectiveand discusses types of effects of cultural heritage on local andregional societies.

One important channel whereby culture benefits economicdevelopment, is through strengthened local or regional iden-tity, and through making places more attractive to live in. Pajuremarks that whether identity is good or bad for growth, willdepend on the type of identity being stimulated (inward- oroutward-looking) [25]. Recent interest in the importance of the‘‘creative class’’ and industrial clusters may have relevance tothe effects of local identity based on traditions and culturalheritage. It may attract persons with strong interest in theissue, but whether these people are innovative for creatingbusiness and jobs, is not evident.

6. Preliminary results

Based on combining data from a survey among tourists atRøros, we have estimated the local economic impacts fromcultural heritage-based tourism at Røros [26]. The basis forour analysis is the number of hotel stays at Røros, taken fromofficial statistics. In the survey we investigate the motivesamong tourists for visiting Røros. Among tourists staying athotels, 60 per cent say that the most important reason forvisiting Røros, was that it was ‘‘a historically interesting site’’.We thus conclude that the cultural heritage at Røros caused 60per cent of individual hotel stays at Røros. Using expendituredata from national tourist surveys, and assumptions of inwhich sectors the tourists spend their money, we calculatedirect and indirect employment effects of tourism that can beattributed to cultural heritage. This exercise is done fordifferent tourist groups, i.e. day-tourists and tourists staying atprivate huts, as well as camping tourists.

From this analysis, we find that some 200 jobs in Rørosdirectly and indirectly are caused by tourism related to culturalheritage. This amounts to 7 per cent of the workforce in thetown. The contribution to income in the region will be ofsimilar magnitude. The effects are largest in the hotel businessand other sectors catering for tourists, but there are positiveeffects for other private services, as well as local governmentservices as well. Benefits also arise from state subsidies formaintenance of old buildings and the like, but these effects arenot included in the numbers mentioned above. Neither arepossible direct effects of cultural heritage on migrationincluded; however, we contend that such effects are small.

7. Conclusions

The survey of research on the effects of culture ona regional economy has shown that political debate has beeninfluenced by exaggerated estimates of the economic effects ofculture, including cultural heritage. Many studies have nottaken proper account of all effects, often focussing only on thepositive effects for the regional economy. Studies have alsovaried with regard to concepts and variables that have beenused to measure the economic effects of investing in culture.That has made the public discourse on the topic difficult.

Our review of the literature has emphasised the importance of

� accounting for all effects, both positive and negative,� of comparing with the effects of alternative government

projects and of� specifying explicitly how the public expenditures on the

cultural project under consideration, are financed.

Despite the earlier deficiencies in the literature, we stillbelieve that both political decision makers and private firmsneed economic impact analyses of cultural heritage projects invarious parts of the country.

In doing such analyses, one difficulty is to find out what wewant to measure the effect of. In a given situation, a local orstate government body will face the question of whether or notto support a cultural festival or the like. In such a situation, it isclear what is the project that is being analysed. But this is notthe issue in our analysis of Røros. Instead, when analysing thelocal economic impacts of the cultural heritage in the form ofold buildings and constructions at Røros, we are looking at theeffects of an entire investment or development strategy, witha potential for attracting visitors and possibly reaping otherbenefits from tourism. Our analysis of the town of Rørossuggests that the cultural heritage there is currently creatingjobs amounting to around 7 per cent of overall employment inthe region.

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