National Endowment for the Arts 
 NEA Research Note #104 
 July 2011 
 
 ART WORKS. 
 
 arts.gov 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 Key Findings 
 
 National 
 
 => As a group, the performing arts, sports, and museum industries contributed S70.9 billion to 
 the U.S. economy in 2009. 
 
 => The motion-picture and sound-recording industries contributed S59.8 billion, while 
 publishing (including software) added $147.7 billion. 
 
 => Real value added by performing arts, sports, and museums contracted 5.5 percent in 2009, 
 after having doubled over a 1 2-year period. 
 
 States 
 
 => New spending on the performing arts contributes more value to states with large and diverse 
 economies. For each new dollar of “value added” by the performing arts industry in 
 California, for example, the state’s economy gains $1.38. For Texas, the comparable figure 
 is $1 .28. 
 
 => The performing arts industry generates a greater number of new jobs in Georgia, 
 
 North Carolina, Ohio, and Utah than in other states. In each case, more than 45 new jobs 
 would result from an additional million dollars in performing-arts spending. 
 
 Value-added refers to the amount an industry adds to Gross Domestic Product through labor 
 and capital (plus taxes on production). 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 1 
 
Overview 
 
 This Research Note uses data from the 
 Department of Commerce’s Bureau of 
 Economic Analysis (BEA) to examine the 
 value added by selected cultural industries to 
 the U.S. economy. For 2009, the most recent 
 year of data, estimates are shown for (1) 
 performing arts, sports, and museums; (2) 
 motion pictures and sound recording; and (3) 
 publishing (including software). 1 Long-term 
 trend analyses of value added by those 
 industries are also provided. 
 
 The term “value-added” has entered the 
 popular lexicon, but has a specific meaning in 
 macroeconomics. With reference to a 
 nation's economy, value-added describes an 
 industry's contributions through labor and 
 capital. Value-added is estimated by using a 
 method similar to that for computing the 
 nation’s gross domestic product (GDP). To 
 prevent double-counting, value-added 
 excludes “intermediary costs” — or costs 
 incurred by other industries to produce goods 
 and services used by the industry in question. 
 
 For example, outlays for toe shoes (worn by 
 ballet dancers when dancing on the tips of 
 their toes, or en pointe ) are excluded from the 
 
 value added by dance companies because the 
 shoes were produced with the labor and 
 capital of shoe manufacturers. Energy costs 
 are also excluded from value-added. 
 
 When discussing national estimates of value- 
 
 added, this Note fuses several cultural 
 
 industries. The performing arts and museum 
 
 industries are considered together, along with 
 
 • 
 
 sports, because annual BEA data do not 
 permit disaggregation. Similarly, the 
 motion-picture and sound-recording 
 industries are combined for the purpose of 
 analysis. 
 
 Disaggregation of value-added trends for 
 these industries is possible — but only every 
 five years, when the BEA releases more 
 detailed, “benchmark” statistics. The most 
 recent of these estimates emerged in 2007, 
 based on 2002 data. In 2002, value added by 
 sports was $16.9 billion — over two times 
 greater than for the performing arts ($7.2 
 billion). Value added by museums was $4.7 
 billion in 2002. 
 
 Although the BEA's national value-added 
 figures for 2009 do not separate the 
 performing arts industry from museum or 
 
 Arts and the GDP; Value Added by Selected Cultural Industries 
 
 2 
 
sports industries, the BEA’s five-year, 
 benchmark data do allow researchers to 
 produce relatively recent estimates of value 
 added by individual industries at the state 
 level. 
 
 For each state, the BEA has released 
 “multipliers” of the value added by those 
 individual industries to the state’s economy, 
 as well as the number of jobs created. The 
 
 BEA achieves this reporting by revising its 
 2002 “benchmark” figures to reflect 2008 
 regional economic conditions. 
 
 Consequently, the second part of this Note 
 examines patterns of value added to state 
 economies, including job creation, and how 
 certain states appear better-positioned to 
 support cultural industry growth. 
 
 How Much Do Cultural Industries Add to the U.S. Economy? 
 
 In 2009, the performing arts, sports, and 
 museums added $70.9 billion to the U.S. 
 economy. That year, the motion-picture and 
 sound-recording industries contributed $59.8 
 billion, while publishing (including software) 
 
 added $147.7 billion. Combined, the three 
 selected cultural industries contributed a 
 total of $278.4 billion to the U.S. economy 
 in 2009. 
 
 Value Added by Selected Cultural Industries, 2009 
 
 (in billions) 
 
 Total for selected cultural industries 
 
 $278.4 
 
 Performing arts, sports, and museums 
 
 $70.9 
 
 Motion picture and sound recording 
 
 $59.8 
 
 Publishing (including software) 
 
 $147.7 
 
 Source: Bureau of Economic Analysis, U.S. Department of Commerce 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 3 
 
Travel and Tourism 
 
 In addition to its main industry accounts, the BEA produces estimates of value-added for several 
 “ satellite accounts, ” which combine estimates for selected industries in correspondence with the ac- 
 count ’s subject, such as healthcare, research and development, and travel and tourism. 
 
 Sponsored by the Office of Travel and Tourism Industries of the International Trade Administration, the 
 travel and tourism satellite account provides estimates of value added by industries such as air and rail 
 transportation, taxi services, and traveler accommodations. 
 
 The travel and tourism account also includes estimates of value added by selected cultural industries. 
 This account shows that in 2008, the most recent data available, the performing arts and movies 
 (combined) added $ 38.9 billion to the U.S. economy. Spectator sports added a similar amount ($22.5 
 billion). Scenic and sightseeing transportation (such as sightseeing buses and trolleys and horse-drawn 
 carriage rides) added $1.6 billion. 
 
 For more information on the travel and tourism account, please see Zemanek, S. and Rzeznik, S. 
 (November 2010). U.S. Travel and Tourism Satellite Accounts for 2004-2009, Survey of Current Busi- 
 ness, are available at http://www.bea. gov/scb/pdf/2010/1 1 %20November/l 1 10_travel.pdf 
 
 The 2007-2009 U.S. Economic Recession 
 
 Overtime, cultural industries have 
 contributed growing amounts to the U.S. 
 economy. Between 1987 and 2009, for 
 example, the inflation-adjusted value added 
 by the performing arts, sports, and museums 
 nearly doubled. 
 
 contractions stemming from the U.S. 
 economic recession that began in December 
 
 2007 and ended in June 2009. Real value 
 added by the performing arts, sports, and 
 museums fell by 1.4 percent in 2008; it 
 dipped 5.5 percent the following year. 
 
 Examining value-added over time also 
 reveals that cultural production exhibits 
 business-cycle fluctuations, including 
 
 Contractions also occurred in the motion- 
 picture and sound-recording industries and in 
 publishing. Real value added by motion 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 4 
 
pictures and sound recording fell by 3.5 
 percent and 2.4 percent in 2008 and 2009, 
 respectively. After growing in 2007 and 
 
 2008, real value added by the publishing 
 industry contracted 7 percent in 2009. 
 
 Value Added by the Performing Arts, Sports, and Museums: 
 
 1987-2009 
 
 $70 
 
 uT $65 
 
 c 
 
 .2 $60 
 2 $55 
 ~ $50 
 •§ $45 
 
 73 
 
 ro $40 
 
 0 ) 
 
 I $35 
 1 $30 
 
 CT3 
 
 <D 
 
 o : $25 
 $20 
 
 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 
 
 Source: Bureau of Economic Analysis, U.S. Department of Commerce 
 
 Value Added by Source 
 
 By definition, value-added is an industry's 
 contribution to the economy through its labor 
 and capital (plus taxes on production). 2 As 
 the table below shows, the majority, 57 per- 
 cent, of the value added by performing 
 arts, sports, and museums derives from 
 labor (compensation of employees). Only 
 
 34 percent stems from capital (gross operat- 
 ing surplus). The motion-picture and sound' 
 recording industries, by contrast, are com- 
 paratively capital-intensive — nearly 51 per- 
 cent of their value-added stems from gross 
 operating surplus. 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 5 
 
Value Added by Source, 2009 
 
 (Dollars in millions) 
 
 
 Labor 
 
 Capital 
 
 Taxes 
 
 Selected cultural industries 
 
 Compensation 
 
 Share of 
 
 Gross operating 
 
 Share of 
 
 Taxes on 
 
 Share of 
 
 
 of employees 
 
 total value 
 added 
 
 surplus 
 
 total value 
 added 
 
 production 
 
 total value 
 added 
 
 Performing arts, sports, 
 
 $40,473 
 
 57.1% 
 
 $24,424 
 
 34.4% 
 
 $6,050 
 
 8.5% 
 
 and museums 
 
 
 
 
 
 
 
 Motion picture 
 
 $26,474 
 
 44.3% 
 
 $30,180 
 
 50.5% 
 
 $3,101 
 
 5.2% 
 
 and sound recording 
 
 
 
 
 
 
 
 Publishing (including software) 
 
 $80,328 
 
 54.4% 
 
 $65,309 
 
 44.2% 
 
 $2,092 
 
 1 .4% 
 
 Source: Bureau of Economic Analysis, U.S. Department of Commerce 
 
 Trends in Value 
 
 Although more labor-intensive than movie 
 and sound-recording production, the 
 performing arts, sports, and museum 
 industries, until recently, were more capital- 
 intensive than the overall economy. In 1987, 
 the share of value added by labor was 49.1 
 percent for performing arts, sports, and 
 museums — well below the 57.8 percent that 
 labor contributed to the total U.S. GDP. 
 
 Over time, however, labor’s share of value 
 added by performing arts, sports, and 
 museums has risen. In 2008, the share of 
 value added by labor in these cultural 
 industries reached 56.5 percent — comparable 
 to the 56.1 percent added by labor to the 
 general economy. In 2009, labor from 
 cultural industries added 55.4 percent — 
 
 Added by Labor 
 
 nearly two percentage points higher than the 
 share of labor used to produce all U.S. goods 
 and services. 
 
 Several factors likely contribute to this 
 pattern. First, labor’s historically low share 
 of value- added for these cultural industries 
 may reflect the high percentage of artists who 
 are self-employed. 3 The incomes of the self- 
 employed are not counted in the national 
 accounts as employee compensation, but 
 rather as gross operating surplus (capital). 
 
 Second, the rising share of labor may reflect 
 higher earnings among professional athletes 
 resulting from the “free agent” system. And 
 third, musical groups, such as pop, rock, and 
 country bands, may now derive more profits 
 from labor-intensive touring than from 
 capital-intensive recording. 4 
 
 Arts and the GDP : Value Added by Selected Cultural Industries 
 
 6 
 
Share of Value Added by Labor 
 
 Performing arts, sports, and museums 
 
 GDP 
 
 Source: Bureau of Economic Analysis, U.S. Department of Commerce 
 
 Dollars and Jobs Added to State Economies by the Performing Arts 
 
 In addition to national estimates of value 
 added by cultural industries, the BEA also 
 produces regional economic multipliers 
 through its RIMS II (regional industrial 
 multiplier system). Included in these 
 calculations are both value-added and 
 employment multipliers. 5 
 
 The BEA provides both annual and 
 “benchmark” RIMS II multipliers. Annually 
 revised regional multipliers, although timely, 
 capture less industry detail. Regional 
 benchmark multipliers, on the other hand, are 
 produced less frequently, but provide greater 
 industry detail. The most recent regional 
 
 benchmark multipliers reflect results from the 
 2002 Economic Census; however, the BEA 
 has adjusted the estimates to reflect regional 
 economies in 2008. Consequently, the 
 current regional benchmark multipliers are 
 labeled 2002/2008. 
 
 Value-Added State Multipliers 
 Looking across states, the BEA performing- 
 arts multipliers are higher for California, 
 Colorado, Georgia, Illinois, Colorado, 
 Tennessee, Texas, New Jersey, and Utah. 
 
 In each of these states, an additional dollar in 
 value added generated by the performing arts 
 industry adds $1 .25 or more to gross state 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
product (GSP). In California, for example, 
 each new dollar of value added by the 
 performing arts increases the California 
 economy by $1 .38. In Georgia that 
 multiplier is $1.32, and in Texas it is $ 1 .28. 
 
 The performing arts multiplier is also 
 comparatively high in Florida — every 
 additional $1 in value added by the 
 performing arts in that state contributes $1.23 
 to Florida's economy. Similar multipliers are 
 reported for New York and Pennsylvania 
 ($1.22). In Ohio, Michigan, and 
 Minnesota, a $1 increase in performing arts' 
 value-added raises the GSP by $1.1 7-$ 1.18. 
 
 At the other end of the spectrum are states 
 where the performing arts value-added 
 multipliers are less than $1. In Wyoming, for 
 example, each additional dollar in value 
 added by the performing arts increases GSP 
 by $0.83. Performing arts value-added 
 multipliers are $0.87 and $0.86 for North 
 Dakota and South Dakota, respectively. 
 
 Why the Performing Arts Contribute More to 
 Some State Economies and Less to Others 
 
 With few exceptions, the BEA’s state 
 multipliers show that a new dollar in value 
 added by the performing arts contributes 
 more to larger state economies and less to 
 economically smaller states. California and 
 
 Texas, for example, are among the highest in 
 value added by the performing arts industry. 
 They also rank first and second, respectively, 
 in GSP. 6 
 
 Alternatively, each new dollar of value added 
 by the performing arts industry contributes 
 less to the economies of North and South 
 Dakota. These states are also among the 
 lowest in GSP — less than $40 billion each. 
 
 This pattern — higher value-added multipliers 
 in economically large states — is common to 
 most industries, not just the performing arts. 
 As a rule, the larger a state is economically, 
 the larger its value-added multiplier is. 
 
 For instance, we have seen that, compared 
 with other states, Texas reports a higher 
 addition to GSP from a $1 increase in value 
 added by the performing arts. This 
 development occurs because Texas' economy 
 is large and diverse enough to supply the 
 “inputs” needed to boost performing arts 
 production. To a larger degree than is true 
 for most other states, Texas does not need to 
 import goods and services such as stage 
 curtains, lighting, sound equipment, scenery 
 materials, and advertising and printing 
 services from other states — to name just a 
 few examples. 
 
 Arts and the GDP . Value Added by Selected Cultural Industries 
 
 8 
 
North Dakota’s economy, on the other hand, 
 is smaller. An increase in performing arts 
 production in that state is more likely to 
 require imports of performing arts-related 
 goods and services from other states. 
 
 Imports, also known as leakages, reduce the 
 importing state’s value-added multipliers. 
 
 Consequently, states with large and diverse 
 economies benefit more from an increase in 
 value added by the performing arts because 
 they have the inputs needed to support 
 such an increase. Economically smaller 
 states, however, must import goods and 
 services to sustain an increase in production 
 by the performing arts industry. These 
 imports serve to reduce the value-added 
 multipliers for the performing arts. 
 
 Employment State Multipliers 
 
 The BEA also generates regional employment 
 multipliers, which report the number of jobs 
 created in all industries within a region by 
 each additional million dollars in output by a 
 particular industry. 7 The 2002/2008 
 performing-arts employment multiplier for 
 Texas, for example, shows that an additional 
 $1 million in performing arts production is 
 expected to create 39 new jobs in that state. 
 
 Comparing multipliers across states reveals 
 
 that job creation resulting from additional 
 production by the performing arts 
 industry is greatest in Utah, North 
 Carolina, Colorado, Indiana, and Ohio. In 
 
 Utah, for example, each additional million 
 dollars of output is estimated to generate 54 
 new jobs in that state. The corresponding 
 multiplier for Colorado is 49 jobs, and in 
 Ohio, it is 47. 
 
 Job creation is also comparatively high in 
 Georgia, Oklahoma, and Michigan. An 
 additional $1 million in state performing arts 
 production is expected to generate 
 approximately 45 jobs, per state. In North 
 Dakota, an additional $1 million in 
 performing arts production will create 43 
 jobs — a figure comparable to Illinois’ 
 performing arts employment multiplier. 
 
 At the other end of this spectrum are New 
 York, South Dakota. Wyoming, and the 
 District of Columbia. The performing arts 
 employment multipliers in these states range 
 from 20 in New York to only 10 in the 
 District. 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 9 
 
Changing Rank in Multipliers 
 
 At first glance, it may appear odd that some 
 states with high value-added multipliers rank 
 low in job creation, while other states place 
 low in value-added but high in job creation. 
 New York, for example, ranks fairly high in 
 gains to gross state product stemming from a 
 $1 increase in value added by its performing 
 arts industry. Yet New York’s job creation 
 resulting from additional performing arts 
 production is among the lowest in the nation. 
 North Dakota displays the opposite pattern — 
 low in value-added but high in job creation. 
 
 The answer to this seemingly unusual pattern 
 lies in the calculation of the employment 
 multiplier. As part of its multi-stage 
 calculation, the employment multiplier 
 includes an employment-to-eamings ratio. 
 The ratio for New York, where new spending 
 on the performing arts contributes 
 comparatively more to the economy, but less 
 to job creation, reveals that working New 
 Yorkers earn more than workers in other 
 states (i.e., high earnings pull the 
 employment-to-earnings ratio down). The 
 opposite is true in North Dakota — its low 
 value-added but high job-creation status 
 suggests that earnings in that state are below 
 average. 
 
 Indeed, among all states and the District of 
 Columbia in 2008, New York ranked 7 th in 
 earnings, while North Dakota was in 43 rd 
 place. 8 
 
 Other states rank highly in value-added and 
 job creation. In states exhibiting this pattern, 
 earnings are often close to the average 
 earnings of all states. Ohio, for instance, 
 ranks fairly high in both value-added and job 
 creation. In 2008, Ohio was 22 nd (close to 
 the middle among all states) in average 
 earnings. 9 
 
 Then, too, there are states with both low 
 value-added multipliers and low employment 
 multipliers. States exhibiting this pattern are 
 likely importing comparatively more labor 
 from other states. A case in point is the 
 District of Columbia, where the performing 
 arts employment multiplier is the lowest in 
 the nation (10 new jobs resulting from an 
 additional $1 million in performing arts 
 production). Although the BEA treats D.C. 
 as a state for calculation purposes, the 
 District is a city that draws many of its 
 workers from nearby Virginia and Maryland. 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 10 
 
Selected Patterns in Performing Arts Multipliers 
 
 Multiplier pattern 
 
 Indication 
 
 Example state 
 
 High value added/low 
 employment 
 
 High state earnings 
 
 New York 
 
 Low value added/high 
 employment 
 
 Low state earnings 
 
 North Dakota 
 
 High value added/high 
 employment 
 
 Average state earnings 
 
 Ohio 
 
 Low value added/low 
 employment 
 
 State imports labor from other 
 states 
 
 District of Columbia 
 
 Dollars and Jobs Added by Museums, 
 
 Although this Note has focused on state-level 
 performing arts multipliers, the 
 accompanying tables report states’ value- 
 added and employment multipliers for other 
 selected cultural industries, including (in 
 aggregate) museums, historical sites, zoos, 
 and nature parks. 
 
 At $1 .46, Texas and Illinois top the list of 
 value-added multipliers for this group of 
 industries. Georgia, Colorado, and California 
 closely follow — in each of these states, a new 
 dollar of value added by this industry group 
 adds $1 .44 to their respective economies. 
 
 At the other end of the spectrum are a 
 number of economically small states such as 
 North and South Dakota and Wyoming. For 
 
 Historical Sites, Zoos, and Nature Parks 
 
 museums, historical sites, zoos, and parks, 
 the value-added multipliers in these states are 
 at approximately $0.98. Just as we witnessed 
 in the performing arts industry, increases in 
 production by museums (and related 
 industries) in these smaller states often 
 requires the import of goods and services 
 from other states. Such imports serve to 
 reduce the value-added multipliers for 
 museums in these states. 
 
 An additional $1 million in production by the 
 museums-and-related industries generates the 
 highest number of new jobs in Utah (35 new 
 jobs) and Alabama and South Carolina (32 
 new jobs in both states). As discussed above, 
 the BEA uses an employment-to-eamings 
 ratio to calculate state employment 
 
 1 1 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
Additional Cultural Multipliers 
 
 multipliers. Consequently, the high rank of 
 Alabama and South Carolina’s job creation 
 likely reflects low earnings in those states — 
 Alabama and South Carolina ranked 40 th and 
 42 nd in 2008 earnings. 
 
 The tables at the end of this Note also include 
 value-added and employment multipliers for 
 spectator sports; motion picture and sound 
 recording; and publishing. 
 
 Considerations about BEA State Multipliers 
 
 There are a number of considerations and as- 
 sumptions built into the BEA regional multi- 
 pliers. To begin with, the $1 in new perform- 
 ing arts spending must be initiated by at least 
 one of four sources: government, investors, 
 exports (e.g., touring performances), or 
 households outside the state. Also, the BEA 
 computes its multipliers through economic 
 models that assume no changes in the combi- 
 nation of goods and services used to generate 
 additional performing arts production. This 
 combination (i.e., the inputs) used to generate 
 new production is assumed to be constant. 
 
 It should also be noted that the multipliers 
 shown above assume that states can provide 
 the labor and capital to sustain an increase in 
 cultural production. In Maryland, for exam- 
 ple, an additional $1 million in performing 
 arts production is expected to generate 41 
 new jobs in that state. This estimate assumes 
 that Maryland can supply the workers needed 
 to fill those new positions. 
 
 Moreover, state economic gains stimulated 
 from additional cultural production are tem- 
 porary. Long-term economic growth stems 
 not from temporary increases in spending, 
 but from the quantity and quality of labor and 
 capital, and from new technologies that em- 
 ploy those resources to develop new systems 
 and products. 
 
 An additional aspect to the BEA state multi- 
 pliers is that they do not reveal whether one 
 industry is larger than another. The multipli- 
 ers merely show a particular industry's inter- 
 action with other industries within a region — 
 in this case, a state. The performing arts in- 
 dustry, for example, may have a very differ- 
 ent “production function”’ (the array of inputs 
 required to generate output) from those of 
 other industries. 
 
 Industry size comparisons are better ascer- 
 tained by examining revenue and number of 
 employees. The table below, which draws on 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 12 
 
data from the 2007 Economic Census, shows 
 that, of the selected cultural industries shown 
 
 for the state of Texas, spectator sports is the 
 largest in revenue and number of employees. 
 
 Revenue and Employees for Selected Cultural Industries 
 Texas, 2007 
 
 Establishments 1 
 
 Revenue 
 
 ($1,000) 
 
 Number of 
 employees 
 
 Arts and entertainment: 
 
 
 
 Performing arts 
 
 $555,160 
 
 5,378 
 
 Spectator sports 
 
 $1,624,110 
 
 6,812 
 
 Museums 
 
 $489,835 
 
 4,419 
 
 Historical sites 
 
 $17,939 
 
 301 
 
 Zoos and botanical gardens 
 
 $179,202 
 
 2,341 
 
 1 Taxable and tax-exempt establishments 
 
 Source: 2007 Economic Census, U.S. Census Bureau, U.S. Department of Commerce 
 
 Conclusion 
 
 NEA Research Note #102, released in April 
 2011, surveyed a variety of ways to assign 
 value to the arts, including: the total revenues 
 and expenditures of arts and cultural indus- 
 tries; the size of their workforce; consumer 
 spending on arts and cultural activities; and 
 time spent attending arts and cultural events. 
 The estimates of value added presented here 
 extend that field of inquiry. 
 
 Nevertheless, as suggested in Note #102, 
 such empirical accounts of “value,” while 
 inherently useful, omit consideration of the 
 arts' impact on multiple domains of Ameri- 
 can life. Ideally, analysis of the arts' “value- 
 added” (in the colloquial sense) would cap- 
 
 ture benefits associated with the arts' role in 
 enhancing civic engagement, health and edu- 
 cational outcomes, creativity and innovation, 
 and a variety of other social goods. 
 
 Even so, there remains the arts’ subjective 
 value proposition to individuals, which, to 
 some extent, has been measured though stud- 
 ies of arts’ “intrinsic impact,” hedonic hous- 
 ing-price models, and contingent valuation 
 (i.e., “willingness-to-pay” studies). 10 Further 
 research is needed to clarify the comparative 
 benefits and drawbacks of each approach, 
 and whether some unforeseen method may 
 yet be preferable. 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 13 
 
For Further Reading 
 
 Streitwieser, M. (2009). A Primer on BEA ’s Industry’ Accounts. BEA Briefing. Retrieved from 
 http:/Avww.bea.gov/scb/pdf/2009/06%20June/0609_indyaccts_primer_a.pdf . 
 
 Harris, T., Joliff, W., Lyndaker, A., & Schroeder, M. (201 1). “Annual Industry Accounts: Re- 
 vised Statistics for 2007-2009,” Survey of Current Business. Retrieved from http:// 
 www.bea.gov/scb/pdf/201 1/01 January/01 1 1 indy_accts.pdf . 
 
 Bureau of Economic Analysis, Economics and Statistics Division, U.S. Department of Com- 
 merce (1997). Regional Multipliers: A User Handbook for the Regional Input-Output Modeling 
 System (RIMS II). Retrieved from http://www.bea.gov/scb/pdf/regional/perinc/meth/rims2.pdf . 
 
 Americans for the Arts (2005). Arts and Economic Prosperity’ III: The Economic Impact of 
 Nonprofit Arts and Cultural Organizations and Their Audiences. Retrieved from http:// 
 www.artsusa.org/pdf/information services/research/services/economicimpact/aepiii/ 
 national report.pdf . 
 
 The NEA Office of Research & Analysis would like to thank Michael Rushton of Indiana 
 University for his invaluable feedback while this Note was in production. 
 
 Produced by Bonnie Nichols 
 
 Director, Sunil Iyengar 
 
 Office of Research & Analysis 
 National Endowment for the Arts 
 1 100 Pennsylvania Avenue, NW 
 Washington, DC 20506 
 
 202-682-5424 
 
 research@arts.gov 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 14 
 
Dollars Added to State Economies by the Performing Arts, 2002/2008 
 
 Increase in Gross State Product from an Additional Dollar of Value Added by the Performing Arts 
 
Source; RIMS n. Type II Multipliers, Bureau of Economic Analysis, US, Commerce Department 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 16 
 
 Jobs Added to State Economies by the Performing Arts, 2002/2008 
 
 Increase in Jobs from an Additional $1 Million in Production by the Performing Arts 
 
Source: Bureau of Economic Analysis, U.S. Department of Commerce 
 
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 17 
 
 Real Value Added by Selected Cultural Industries 
 
 (Billions of chained 2005 dollars) 
 
Performing Arts State Multipliers, 2002/2008 
 
 State 
 
 Performing arts multipliers 
 
 Gross state 
 product in 2008 
 (millions) 
 
 Value added 1 
 
 Employment 2 
 
 Alabama 
 
 $1.06 
 
 40 
 
 $169,694 
 
 Alaska 
 
 $0.96 
 
 21 
 
 $49,186 
 
 Arizona 
 
 $1.14 
 
 42 
 
 $260,454 
 
 Arkansas 
 
 $0.98 
 
 40 
 
 $99,497 
 
 California 
 
 $1.38 
 
 25 
 
 $1,911,741 
 
 Colorado 
 
 $1.30 
 
 49 
 
 $254,218 
 
 Connecticut 
 
 $1.17 
 
 39 
 
 $225,958 
 
 Delaware 
 
 $1.07 
 
 34 
 
 $58,674 
 
 District of Columbia 
 
 $0.88 
 
 10 
 
 $97,361 
 
 Florida 
 
 $1.24 
 
 28 
 
 $747,770 
 
 Georgia 
 
 $1.32 
 
 46 
 
 $405,269 
 
 Hawaii 
 
 $1.16 
 
 31 
 
 $66,119 
 
 Idaho 
 
 $0.94 
 
 21 
 
 $55,212 
 
 Illinois 
 
 $1.30 
 
 43 
 
 $637,037 
 
 Indiana 
 
 $1.09 
 
 47 
 
 $263,616 
 
 Iowa 
 
 $0.93 
 
 38 
 
 $134,959 
 
 Kansas 
 
 $0.97 
 
 25 
 
 $125,333 
 
 Kentucky 
 
 $1.06 
 
 32 
 
 $155,592 
 
 Louisiana 
 
 $1.06 
 
 42 
 
 $213,441 
 
 Maine 
 
 $1.10 
 
 33 
 
 $49,972 
 
 Maryland 
 
 $1.16 
 
 41 
 
 $281,659 
 
 Massachusetts 
 
 $1.19 
 
 30 
 
 $365,623 
 
 Michigan 
 
 $1.17 
 
 45 
 
 $375,436 
 
 Minnesota 
 
 $1.17 
 
 42 
 
 $262,758 
 
 Mississippi 
 
 $0.95 
 
 36 
 
 $96,713 
 
 Missouri 
 
 $1.16 
 
 33 
 
 $241,344 
 
 Montana 
 
 $0.97 
 
 30 
 
 $35,838 
 
 Nebraska 
 
 $0.94 
 
 42 
 
 $84,884 
 
 Nevada 
 
 $1.15 
 
 23 
 
 $132,270 
 
 New Hampshire 
 
 $1.16 
 
 34 
 
 $58,780 
 
 New Jersey 
 
 $1.28 
 
 28 
 
 $483,560 
 
 New Mexico 
 
 $1.04 
 
 39 
 
 $77,168 
 
 New York 
 
 $1.22 
 
 20 
 
 $1,109,080 
 
 North Carolina 
 
 $1.14 
 
 50 
 
 $403,927 
 
 North Dakota 
 
 $0.87 
 
 42 
 
 $31,677 
 
 Ohio 
 
 $1.18 
 
 47 
 
 $470,640 
 
 Oklahoma 
 
 $1.08 
 
 45 
 
 $151,850 
 
 Oregon 
 
 $1.13 
 
 30 
 
 $174,454 
 
 Pennsylvania 
 
 $1.22 
 
 33 
 
 $545,198 
 
 Rhode Island 
 
 $1.09 
 
 43 
 
 $47,378 
 
 South Carolina 
 
 $1.13 
 
 36 
 
 $159,500 
 
 South Dakota 
 
 $0.86 
 
 19 
 
 $38,293 
 
 Tennessee 
 
 $1.29 
 
 25 
 
 $247,796 
 
 Texas 
 
 $1.28 
 
 39 
 
 $1,202,104 
 
 Utah 
 
 $1.26 
 
 54 
 
 $112,353 
 
 Vermont 
 
 $1.06 
 
 30 
 
 $24,636 
 
 Virginia 
 
 $1.18 
 
 40 
 
 $402,853 
 
 Washington 
 
 $1.16 
 
 42 
 
 $334,477 
 
 West Virginia 
 
 $0.93 
 
 25 
 
 $59,039 
 
 Wisconsin 
 
 $1.09 
 
 30 
 
 $239,150 
 
 Wyoming 
 
 $0.83 
 
 15 
 
 $38,917 
 
 1 Dollar increase in gross state product from each additional dollar of value added by the performing arts industry. 
 
 2 Total increase in number of jobs that occurs in all industries within the state for each additional million dollars 
 of production by the performing arts industry. 
 
 Source. RIMS II, Type II Multipliers, 2002/2008, Bureau of Economic Analysis, U.S. Department of Commerce 
 
 While the BEA provided the multipliers presented in this Note, all analysis was conducted by the NEA's Office of Research & Analysis. 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 18 
 
State Multipliers for Museums, Historical Sites, Zoos, and Parks and for Spectator Sports, 2002/2008 
 
 State 
 
 Museums, historical sites, zoos, 
 and parks 
 
 Spectator sports 
 
 Value added 1 
 
 Employment 2 
 
 Value added 1 
 
 Employment 2 
 
 Alabama 
 
 $1.22 
 
 32 
 
 $1.16 
 
 20 
 
 Alaska 
 
 $1.12 
 
 21 
 
 $1.07 
 
 23 
 
 Arizona 
 
 $1.33 
 
 27 
 
 $1.28 
 
 17 
 
 Arkansas 
 
 $1.11 
 
 24 
 
 $1.08 
 
 32 
 
 California 
 
 $1.44 
 
 24 
 
 $1.49 
 
 23 
 
 Colorado 
 
 $1.44 
 
 28 
 
 $1.48 
 
 19 
 
 Connecticut 
 
 $1.26 
 
 23 
 
 $1.23 
 
 23 
 
 Delaware 
 
 $1.19 
 
 21 
 
 $1.16 
 
 17 
 
 District of Columbia 
 
 $0.91 
 
 5 
 
 $0.93 
 
 4 
 
 Florida 
 
 $1.38 
 
 28 
 
 $1.37 
 
 20 
 
 Georgia 
 
 $1.44 
 
 27 
 
 $1.44 
 
 22 
 
 Hawaii 
 
 $1.27 
 
 27 
 
 $1.19 
 
 31 
 
 Idaho 
 
 $1.07 
 
 28 
 
 $1.02 
 
 30 
 
 Illinois 
 
 $1.46 
 
 25 
 
 $1.47 
 
 21 
 
 Indiana 
 
 $1.24 
 
 27 
 
 $1.30 
 
 26 
 
 Iowa 
 
 $1.05 
 
 29 
 
 $1.03 
 
 32 
 
 Kansas 
 
 $1.12 
 
 28 
 
 $1.04 
 
 15 
 
 Kentucky 
 
 $1.21 
 
 29 
 
 $1.23 
 
 33 
 
 Louisiana 
 
 $1.18 
 
 26 
 
 $1.25 
 
 20 
 
 Maine 
 
 $1.23 
 
 27 
 
 $1.19 
 
 35 
 
 Maryland 
 
 $1.33 
 
 25 
 
 $1.32 
 
 21 
 
 Massachusetts 
 
 $1.35 
 
 22 
 
 $1.35 
 
 14 
 
 Michigan 
 
 $1.29 
 
 31 
 
 $1.37 
 
 23 
 
 Minnesota 
 
 $1.32 
 
 26 
 
 $1.38 
 
 17 
 
 Mississippi 
 
 $1.10 
 
 30 
 
 $1.03 
 
 17 
 
 Missouri 
 
 $1.28 
 
 24 
 
 $1.36 
 
 16 
 
 Montana 
 
 $1.10 
 
 30 
 
 $1.05 
 
 19 
 
 Nebraska 
 
 $1.04 
 
 28 
 
 $1.04 
 
 32 
 
 Nevada 
 
 $1.22 
 
 25 
 
 $1.17 
 
 26 
 
 New Hampshire 
 
 $1.27 
 
 28 
 
 $1.21 
 
 31 
 
 New Jersey 
 
 $1.37 
 
 24 
 
 $1.42 
 
 19 
 
 New Mexico 
 
 $1.14 
 
 25 
 
 $1.10 
 
 19 
 
 New York 
 
 $1.28 
 
 20 
 
 $1.29 
 
 16 
 
 North Carolina 
 
 $1.26 
 
 30 
 
 $1.31 
 
 25 
 
 North Dakota 
 
 $0.98 
 
 26 
 
 $0.97 
 
 16 
 
 Ohio 
 
 $1.33 
 
 28 
 
 $1.39 
 
 23 
 
 Oklahoma 
 
 $1.21 
 
 30 
 
 $1.21 
 
 37 
 
 Oregon 
 
 $1.29 
 
 28 
 
 $1.28 
 
 24 
 
 Pennsylvania 
 
 $1.37 
 
 26 
 
 $1.41 
 
 19 
 
 Rhode Island 
 
 $1.22 
 
 25 
 
 $1.20 
 
 32 
 
 South Carolina 
 
 $1.30 
 
 31 
 
 $1.19 
 
 33 
 
 South Dakota 
 
 $0.98 
 
 28 
 
 $0.96 
 
 24 
 
 Tennessee 
 
 $1.37 
 
 29 
 
 $1.43 
 
 18 
 
 Texas 
 
 $1.46 
 
 29 
 
 $1.43 
 
 21 
 
 Utah 
 
 $1.39 
 
 35 
 
 $1.43 
 
 27 
 
 Vermont 
 
 $1.15 
 
 26 
 
 $1.10 
 
 19 
 
 Virginia 
 
 $1.34 
 
 26 
 
 $1.29 
 
 24 
 
 Washington 
 
 $1.33 
 
 26 
 
 $1.35 
 
 20 
 
 West Virginia 
 
 $1.03 
 
 20 
 
 $1.02 
 
 23 
 
 Wisconsin 
 
 $1.23 
 
 31 
 
 $1.30 
 
 21 
 
 Wyoming 
 
 $0.97 
 
 20 
 
 $0.90 
 
 12 
 
 1 Dollar increase in gross state product from each additional dollar of value added by the selected industry. 
 
 2 Total increase in number of jobs that occurs in all industries within the state for each additional million dollars 
 of production by the selected industry. 
 
 Source: RIMS II, Type II Multipliers, 2002/2008, Bureau of Economic Analysis, U.S Department of Commerce 
 
 While the BEA provided the multipliers presented in this Note, all analysis was conducted by the NEA's Office of Research & Analysis 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 19 
 
State Multipliers for Motion Pictures and Sound Recording and for Publishing, 2002/2008 
 
 State 
 
 Motion pictures and sound 
 recording 
 
 Publishing 
 
 Value added 1 
 
 Employment 2 
 
 Value added 1 
 
 Employment 2 
 
 Alabama 
 
 $0 94 
 
 22 
 
 $0.95 
 
 15 
 
 Alaska 
 
 $0 86 
 
 21 
 
 $0.83 
 
 15 
 
 Arizona 
 
 $1.03 
 
 19 
 
 $1.07 
 
 14 
 
 Arkansas 
 
 $0 88 
 
 18 
 
 $0.86 
 
 14 
 
 California 
 
 $1.22 
 
 12 
 
 $1.25 
 
 12 
 
 Colorado 
 
 $1.13 
 
 19 
 
 $122 
 
 13 
 
 Connecticut 
 
 $0.98 
 
 13 
 
 $1.06 
 
 10 
 
 Delaware 
 
 $0.92 
 
 15 
 
 $0.91 
 
 11 
 
 District of Columbia 
 
 $0.83 
 
 3 
 
 $0.73 
 
 2 
 
 Florida 
 
 $1.13 
 
 14 
 
 $1.12 
 
 15 
 
 Georgia 
 
 $1.16 
 
 16 
 
 $1.23 
 
 15 
 
 Hawaii 
 
 $0.96 
 
 15 
 
 $0.92 
 
 13 
 
 Idaho 
 
 $0.85 
 
 8 
 
 $0.83 
 
 13 
 
 Illinois 
 
 $1.17 
 
 14 
 
 $1.20 
 
 13 
 
 Indiana 
 
 $0.97 
 
 22 
 
 $0.96 
 
 14 
 
 Iowa 
 
 $0.84 
 
 21 
 
 $0.81 
 
 12 
 
 Kansas 
 
 $0.86 
 
 22 
 
 $0.89 
 
 11 
 
 Kentucky 
 
 $0.94 
 
 22 
 
 $0.98 
 
 16 
 
 Louisiana 
 
 $0.95 
 
 15 
 
 $0.96 
 
 15 
 
 Maine 
 
 $0.97 
 
 14 
 
 $0.96 
 
 17 
 
 Maryland 
 
 $1.10 
 
 15 
 
 $1.09 
 
 12 
 
 Massachusetts 
 
 $1.05 
 
 13 
 
 $1.16 
 
 10 
 
 Michigan 
 
 $1.04 
 
 17 
 
 $1.08 
 
 14 
 
 Minnesota 
 
 $1.06 
 
 18 
 
 $1.07 
 
 12 
 
 Mississippi 
 
 $0.90 
 
 8 
 
 $0.85 
 
 16 
 
 Missouri 
 
 $1.01 
 
 17 
 
 $1.04 
 
 11 
 
 Montana 
 
 $0.87 
 
 24 
 
 $0.84 
 
 18 
 
 Nebraska 
 
 $0.86 
 
 8 
 
 $0.82 
 
 13 
 
 Nevada 
 
 $1.06 
 
 14 
 
 $0.93 
 
 12 
 
 New Hampshire 
 
 $0.90 
 
 11 
 
 $1.05 
 
 10 
 
 New Jersey 
 
 $1.09 
 
 12 
 
 $1.15 
 
 11 
 
 New Mexico 
 
 $0.99 
 
 14 
 
 $0.87 
 
 14 
 
 New York 
 
 $1.16 
 
 9 
 
 $1.02 
 
 9 
 
 North Carolina 
 
 $1.00 
 
 18 
 
 $1.03 
 
 13 
 
 North Dakota 
 
 $0.78 
 
 6 
 
 $0.76 
 
 9 
 
 Ohio 
 
 $1.04 
 
 20 
 
 $1.10 
 
 14 
 
 Oklahoma 
 
 $0.96 
 
 20 
 
 $0.99 
 
 16 
 
 Oregon 
 
 $1.00 
 
 15 
 
 $1.07 
 
 13 
 
 Pennsylvania 
 
 $1.09 
 
 15 
 
 $1.16 
 
 14 
 
 Rhode Island 
 
 $0.94 
 
 14 
 
 $1.01 
 
 12 
 
 South Carolina 
 
 $1.00 
 
 22 
 
 $1.01 
 
 15 
 
 South Dakota 
 
 $0.77 
 
 19 
 
 $0.74 
 
 15 
 
 Tennessee 
 
 $1.33 
 
 13 
 
 $1.11 
 
 15 
 
 Texas 
 
 $1.33 
 
 16 
 
 $1.23 
 
 14 
 
 Utah 
 
 $1.12 
 
 21 
 
 $1.18 
 
 16 
 
 Vermont 
 
 $0.97 
 
 22 
 
 $0 90 
 
 14 
 
 Virginia 
 
 $1.02 
 
 14 
 
 $1.10 
 
 11 
 
 Washington 
 
 $1.04 
 
 17 
 
 $1.11 
 
 11 
 
 West Virginia 
 
 $0.87 
 
 9 
 
 $0.81 
 
 14 
 
 Wisconsin 
 
 $1.03 
 
 17 
 
 $1.01 
 
 14 
 
 Wyoming 
 
 $0.82 
 
 22 
 
 $0.75 
 
 17 
 
 1 Dollar increase in gross state product from each additional dollar of value added by the selected industry 
 
 2 Total increase in number of jobs that occurs in all industries within the state for each additional million dollars 
 of production by the selected industry. 
 
 Source: RIMS II, Type II Multipliers, 2002/2008, Bureau of Economic Analysis, U S. Department of Commerce 
 
 While the BEA provided the multipliers presented in this Note, all analysis was conducted by the NEA's Office of Research & Analysis 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
 20 
 
Endnotes 
 
 1 Estimates of value added by performing arts, sports, and museums include the related 
 industries of promoters, agents, and independent artists, writers, and performers. 
 
 2 Taxes on production consist largely of general sales and property taxes. Taxes on 
 production exclude corporate income taxes, which tax profits rather than production. For 
 more information on the three components of value- added, please see the BEA’s Gross 
 Domestic Product by State Estimation Methodology (2006), available at http://www.bea.gov/ 
 regional/pdf/gsp/GDPState.pdf . 
 
 3 In 2010, 6.9 percent of the civilian labor force was self-employed. Among writers and 
 authors alone, the proportion self-employed was 41.7 percent. Current Population Survey, 
 Annual Averages for 2010, Bureau of Labor Statistics. 
 
 4 French, D. (201 1, Jan. 21). “What Mick Jagger Knows About Making Money in Music.” 
 
 The Christian Science Monitor. Retrieved from http://www.csmonitor.com/Business/Mises- 
 Economics-Blog/201 1/0121/What-Mick-Jagger-knows-about-making-money-in-music 
 
 5 The state-level BEA multipliers presented in this Note are not comparable to those used in 
 several well-known studies of the economic impact of the arts — for example, Arts and 
 Economic Prosperity III , a 2005 publication by Americans for the Arts. AFTA's figures are 
 based on 1 56 participating communities, and capture the impact of additional spending by 
 nonprofit arts and cultural organizations. In terms of job creation, AFTA focused on full-time 
 equivalents, or FTEs. 
 
 The BEA state multipliers, meanwhile, are based on nationally representative surveys, as well 
 as the U.S. Economic Census. The multipliers discussed here reflect specific cultural 
 industries, such as the performing arts or publishing. The BEA multipliers also make no 
 distinction between nonprofit and for-profit establishments. Finally, the state-level 
 employment multipliers capture all jobs, full-time and part-time alike. 
 
 6 In 2010, California's GSP was $1.9 trillion. Texas’ GSP was $1.2 trillion. For a list and 
 ranking of GSP, please see BEA’s Gross State Product Interactive Map, available at http:// 
 www.bea.gov/regional/gdpmap/ . 
 
 “Output” is defined as change in final demand, or change in output delivered to final users. 
 
 8 t 
 National Occupation Employment and Wage Estimates by Industry, Bureau of Labor 
 
 Statistics, U.S. Department of Labor. 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
9 Not all states ranking highly in both performing arts value-added and employment multipliers 
 exhibit average earnings. Colorado, a state with high value-added and employment multipliers, 
 ranked 10 ,h in the nation in 2008 earnings. This ranking suggests that factors other than 
 earnings influenced Colorado’s comparatively high performing arts employment multiplier. 
 Colorado may import fewer inputs from other states, or it may have more part-time cultural 
 workers, which would increase the employment-to-earnings ratio used to calculate its 
 employment multiplier. 
 
 111 Please see the “Other Models, Other Measures” section ofNEA Research Note #102, 
 available at http://www.nea.gov/research/Notes/102.pdf . 
 
 Arts and the GDP: Value Added by Selected Cultural Industries 
 
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