Presentation on Cultural Value and its measurement

1. Measuring Cultural Value
Alan Freeman
University of

2. Our paper draws on experiences of three analysts
working in cultural policy and research
– Hasan Bakhshi at NESTA, visiting professor at City
University
– Alan Freeman at GLA
– Graham Hitchen at LDA
For my part, working within the framework of
‘Creative Industries’
– Three creative industry reports for Greater London
– Cultural Audit of London

3. What was
missing?
 Policy, policy, policy:
– Evidence but as yet no methodology
– Policy-makers cannot yet take decisions informed it
– Risk of ‘pseudo-positivism’
 Reasons
– I think we still don’t understand how arts markets work
– Relation between creativity and innovation not understood
•
(Discussion: http://mpra.ub.uni-muenchen.de/9007/ )
– Very little information about non-market sector

4. ‘Instrumental’ vs ‘Intrinsic’ as the
arts sector sees it
“The gathering of evidence about the impact of the sector has assumed
centre stage in the management of the subsidised cultural sector in
England. It is closely associated with an extension of government
control over the sector, and the tendency to value culture for its ‘impact’
rather than its intrinsic value.”
(Selwood 2002)
“[A] growing sense of unease pervades the cultural sector as it sets
about justifying its consumption of public money. Instead of talking
about what they do – displaying pictures or putting on dance
performances – organisations will need to demonstrate how they have
contributed to wider policy agendas such as social inclusion, crime
prevention and learning.”
(Holden 2004:13)
“Too often politicians have been forced to debate culture in terms only
of its instrumental benefits to other agendas. . . . In political and public
discourse in this country we have avoided the more difficult approach of
investigating, questioning and celebrating what culture actually does in
and of itself “

5. Is the value of art measurable at all?
Intrinsic benefits of the arts are intangible and
difficult to define. They lie beyond the traditional
quantitative tools of the social sciences, and often
beyond the language of common experience.
Although many advocates of the arts believe
intrinsic benefits are of primary importance, they are
reluctant to introduce them into the policy
discussion because they do not believe such ideas
will resonate with most legislators and
policymakers…the arts community is expected to
focus on tangible results that have broad political
backing, such as improved educational performance
and economic development.

6. A summary
 Creative industries approach is ‘instrumental’
– Arts engagement has ‘merit in its own right’
– Arts should not be judged on non-artistic effects
 More fundamental: measurement as such damages our
ability to appreciate the real value of art
– The intrinsic value of art is not quantifiable
– Insofar as it is quantifiable, it is multi-dimensional
– The intrinsic value of art is subjective

7. These criticisms apply to the use of
economics: not economics itself
Economics is ‘at home’ with
subjective valuation and intrinsic
value
Cultural economics has established a methodology
to take into account the intrinsic value of art
–
–
–
–
Concepts (eg existence, option, heritage benefits)
Measurement methods (eg CVM, WTP)
Research methods
Expertise and a community of practitioners
(discussion http://mpra.ub.uni-muenchen.de/14902/)

8. An obstructed (and obstructive)
debate
 Cultural economics was not being referred to in the
policy-making field
– Particularly at regional and local level
 Arts community and policymakers ignorant of a body
of knowledge which
– accords with the criticisms voiced
– is rooted in established economic theory
 Failure to make use of this has led to
– retreat from dialogue
– a tendency to 'special case' arguments

9. Cultural economics – a well-defined
tradition
Ruskin – artistic labour as a source of value
1910, special issue of Volkswirtschaftliche Blätter
Bruno Frey (2004) Arts & Economics: Analysis & Cultural Policy
Baumol and Bowen (1966) The Performing Arts – the Economic
Dilemma
Thomas Moore (1968) ‘The American Theatre’
Alan Peacock and Ronald Weir ‘The Subsidised Muse’
Mark Blaug (1976) first book of readings
Throsby and Withers (2004) ‘The Economics of the Performing Arts’
Ruth Towse (2004) A Handbook of Cultural Economics
At least major journals of cultural economics
JEL classification ‘Z’

10. Revealed (commercial) value
“You are a clever, generous man, Dymov,” she used to say, “but you have one
very serious defect. You take absolutely no interest in art. You don't believe in
music or painting.”
“I don't understand them,” he would say mildly. “I have spent all my life in
working at natural science and medicine, and I have never had time to take an
interest in the arts.”
“But, you know, that's awful, Dymov!”
“Why so? Your friends don't know anything of science or medicine, but you don't
reproach them with it. Every one has his own line. I don't understand landscapes
and operas, but the way I look at it is that if one set of sensible people devote their
whole lives to them, and other sensible people pay immense sums for them, they
must be of use. I don't understand them, but not understanding does not imply
disbelieving in them.”
(Chekhov, The Grasshopper)

11. Stated (Public) Value
 Contingent Valuation (Willingness to Pay)
– Work in progress
– Sufficiently accepted to be used to value environmental
impacts, eg Exxon Valdez 1989
– Many criticisms (cf Spash)
– But established methodology
 Subjective Wellbeing (‘Happiness’)
– Well supported by DCMS and others
– Links to ‘value of sport’
 NOTE: the two procedures do not produce the same
results
 A field for research
 Highly relevant to new REF ‘impact’ requirement
 Prized by policymakers and evaluators

12. Nobody says ‘stated value’
measurement is a
perfected standard
BUT a price is to be paid if it is eschewed on
these grounds

13. The risks of arts exemption
Valuation methodologies are not perfect.
But
– They provide ‘policy commensurability’
– Permit allocation across expenditure headings on common criteria
To say this is inappropriate for the arts, is actually to
say the arts are a special case
But everything is ‘special’ – for example education.
– Are the arts ‘more special than others’?
– (at least, as regards making claims on the public purse)
– If metrics are wrong for the arts, why are they right for education?
And: we still need to say what that case actually is
Finally: is the real fear that the arts will lose funding?
– But if the public really values art, proper research should reveal this.
If the results are wrong, we may need better research, not no
research
– Exemption makes the arts vulnerable to ‘anti-special case’

14. A research agenda

15. Can we afford to fail?
“We are capable of shutting off the sun and the stars
because they do not pay a dividend. London is one of the
richest cities in the history of civilization, but it cannot
“afford” the highest standards of achievement of which its
own living citizens are capable, because they do not “pay”.
If I had the power today I should surely set out to endow
our capital cities with all the appurtenances of art and
civilization on the highest standards of which the citizens
of each were individually capable, convinced that what I
could create, I could afford – and believing that the money
thus spent would not only be better than any dole, but
would make unnecessary any dole.”
(John Maynard Keynes)