Valuing small to medium arts venues

Cost Benefit Framework

Every activity has inputs, which come at a cost. These include direct costs of goods and services, which enable it, and costs of consumption that might otherwise be spent on alternative activities (for example, the cost of the time an individual spends performing the activity, or the otherwise fallow infrastructure they demand for its performance).

Investment of these current and opportunity costs creates the activity; in this instance, the attendance of gallery and art spaces. This, in turn, may alter (for better or worse) one or all of the four states of human capital in the individuals and society participating in it.

Physical capital refers here to the saleable assets created by the activity. Human capital refers to, among other things, a person’s health, psychological well-being, knowledge and skills; whereas, social capital is an individual’s extant levels of happiness, trust, and engagement with others. Symbolic capital recognises the extent to which the activity and its artefacts inspire an individual, or gives them something to aspire to.


Figure : Cost / Benefit Framework
Capital of any kind, however, is a latent attribute. As such, it does not so much defeat measurement; it is just that its measurement is highly arbitrary and, for economic purposes, somewhat pointless. It is only when the potential of capital is expressed that it has utility, or value. Tangible and measurable expressions of capital include changes to an individual’s health, productivity and well-being; and, changes to commercial and civic net worth (through enlarged (or diminished) profits and/or avoided (or added) costs).

To that end, this report uses:

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  financial analysis to scope the small- to medium-sized gallery and art space ecosystem in the City of Sydney
  
• 
  revealed preference and travel cost methodologies to arrive at estimates of direct and opportunity costs
  
• 
  economic impact analysis to estimate productivity and commercial outcomes,
  
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  qualitative analysis to describe the ‘capital’ outcomes of art space activity and their relationship to inputs and outputs, and
  
• 
  contingent valuation to describe the perceived use and non-use values of the collective enterprises.
  

Data collection

The analysis carried out in this study was supported and validated by:

• 
  telephone survey interviews with residents of Sydney including consumers and non-consumers of galleries and art spaces (n=404)
  
• 
  face-to-face survey interviews with attendees of art spaces in Sydney (n=532), and
  
• 
  qualitative interviews with S2M staff from Artist Run Initiatives, Public Galleries, Commercial Galleries, University galleries and Contemporary Art Organisations operating in the City of Sydney.
  

Qualitative data has been used to provide an account of the sector’s operation from the perspective of producers. The data was examined using qualitative content analysis to identify themes emerging from similar responses to interview and survey questions. These themes were refined and, where possible, standardised to provide a summary of the sector and its activities. Strict data collection and management protocols were employed to ensure no venue or respondent could be uniquely identified.

The field (face-to-face) survey sampled attendees of art spaces. In order to normalise the sample we therefore weighted it against the most recent ABS data on “art gallery attendance (ABS, 2015a).

Applying the weights shown in the above table below, sample ages were not significantly different from the population distributions of popular music patrons (p>0.05).

Age	Male	Female
18 to 24	0.32	0.25
25 to 34	0.36	0.28
35 to 44	1.37	1.07
45 to 54	2.07	1.62
55 to 64	2.93	2.29
65+	5.73	4.48

Weighting does not account for other potential biases introduced by our sampling method. For example, a disproportionate number of respondents may have been more highly engaged by art spaces than general attendees, and performing artists and industry workers were potentially over-represented. Based on our survey the audience for S2M spaces appears skewed towards people working or studying in the visual arts rather than the general public. 70% of survey respondents in this research reported some professional affiliation with the visual arts. This is unlikely to be due to sampling bias, as we conducted data collection across mutlipe locations including S2M arts spaces, larger galleries and festival sites as well as online.

In addition, a randomized telephone survey of Sydney residents was conducted. In order to normalise the sample, we weighted it against the most recent ABS data on the population of Sydney (ABS 2016).

Age	Male	Female
18 to 24	4.50	2.88
25 to 34	3.48	2.23
35 to 44	2.27	1.45
45 to 54	1.11	0.71
55 to 64	0.78	0.50
65+	0.71	0.45

After applying the weights shown above, sample age and gender were not significantly different from the population distributions of arts patrons (p>0.05 for both).