How Much For A Year Of Your Cultural Enjoyment?

Last week I briefly noted that people and businesses often value being in a community in which arts organizations are present, even if they don’t participate in their activities. I mentioned this constitutes an intangible value that the arts organization has in the community.

That reminded me of a post made by Sunil Iyengar, NEA Director of Research and Analysis about a novel approach being used to assess the value of cultural institutions in the UK.

Rather than using Willingness to Pay as a measure of how much people valued an arts/cultural institution (as in, how much would you be willing to pay for…?), they asked how much people would be Willing to Accept in order to maintain quality of life in the temporary absence of that organization.

Crucially,” the report explains, “compensation is only offered to those who previously indicated that their life satisfaction would decrease if the institution were temporarily closed.” To these respondents, a questionnaire asks:

“Now imagine the following situation. Suppose that in order to compensate you for not being able to visit the [cultural institution] during one year, you were given a cash compensation. How much money would you have to receive, as a one-off payment, to give you the same life satisfaction that you have now (not better nor worse, but just the same) during this period until the [institution] re-opened? Think about this for a moment please.”

Think about this concept for a moment and run the hypothetical scenario through you mind. First ask yourself how much you would be willing to pay at your favorite performance hall or museum. Now think about how much you would ask for if someone said they would compensate you for your loss of life satisfaction while that favorite place is closed for a year.

I don’t know about you, but if I am being honest that second number is at least 1.5 times more than the first, sometimes 2 times as high as the first.

Kinda gives you pause to think about your real priorities and values, doesn’t it?

The full research paper evaluating this as a viable approach to researching how much people value a cultural institution notes a few problems with using Willingness to Pay (WTP) as a measure. Among them:

Last, but not least, some have raised ethical concerns about the appropriateness of using WTP at all to value services like health and culture. This may, for example, be because value is related to ability to pay and the prevailing income distribution may be seen as inequitable; or because using money to value health and culture may send an undesirable signal (namely that health and cultural services are just like any other commodity bought and sold in the market place) (Fujiwara and Dolan, 2014)

and when Willingness to Accept may be provide a valuable measure:

…there are times when WTA could be warranted. This may be when respondents come from very poor backgrounds, say, such that their WTP amounts are severely constrained and they feel uncomfortable about being asked to pay (even if they might be prepared to pay a small amount), and hence offer a protest zero. Another scenario which may warrant use of a WTA question is when property rights are such that respondents can be judged to have some intrinsic right to the good/service – and what’s more they recognise this. This may be especially relevant for cultural activities and institutions.

The researchers compared WTP and WTA in relation to the Tate Liverpool Gallery and National History Museum and the differences weren’t as great as I imagined. The mention of intrinsic right to good/service made me wonder if there would be a difference between the U.S. and UK in that the more subsidized access to art of the latter might cause residents of the UK to take access to culture more for granted.

It could be equally possible that as an arts professional, I value arts and culture more highly than regular citizens of either country might.

The paper evaluating WTA as a tool goes into such detail about the relevance and accuracy of data obtained that I felt a little out of my depth trying to understand it all. I would suggest not trying this at home without deeper study because it is not something to blithely toss into audience surveys.

It can be useful as thought experiment (or blog post) to drive a conversation and self examination about how we value arts and culture in our lives.

The prospect of an arts organization’s absence from the community for a year may not be a cause of concern for individuals and businesses that don’t participate in activities, but like the idea of living in a community that provides those activities. If there is going to be any method that comes close to quantifying the intangible value a cultural institution has in the community for these groups, this may it.

About Joe Patti

I have been writing Butts in the Seats (BitS) on topics of arts and cultural administration since 2004 (yikes!). Given the ever evolving concerns facing the sector, I have yet to exhaust the available subject matter. In addition to BitS, I am a founding contributor to the ArtsHacker (artshacker.com) website where I focus on topics related to boards, law, governance, policy and practice.

I am also an evangelist for the effort to Build Public Will For Arts and Culture being helmed by Arts Midwest and the Metropolitan Group. (http://www.creatingconnection.org/about/)

I am currently the Director of the Grand Opera House in Macon, GA.

Among the things I am most proud are having produced an opera in the Hawaiian language and a dance drama about Hawaii's snow goddess Poli'ahu while working as a Theater Manager in Hawaii. Though there are many more highlights than there is space here to list.

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