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Economic Development
The Economic Impact of Montana Artists
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Economic Impacts
The importance of the artist community to the economic well-being of the state of Montana was one focus of this study. Data collected from the respondents regarding sales indicated that the respondents had over $ 28 million dollars in sales. The economic impact of artists on the state was evaluated using the IMPLAN model. This model utilizes input-output co-efficients to track linkages between sectors of the economy and the flows of funds and jobs from one sector to another. To evaluate the effects on the economy, the amount of sales reported by the respondents was examined for its effect on other sectors. The results are summarized in Table 1.
Table 1: Value of Economic Activity Generated by Respondents
| Employment (jobs) |
Output (dollars) |
|
|---|---|---|
| Direct | 411 | $28,102,987 |
| Indirect | 222 | $6,468,284 |
| Induced | 96 | $5,214,106 |
| Total | 729 | $39,785,377 |
The economic effects fall into three general categories. The direct effects are those which fall on artists and art production-related businesses. The indirect effects accrue to businesses that the artists utilize. An example would be that as the artist has higher sales, he/she now purchases accounting services to assist in the record keeping for the business. The third type of effect is referred to as the induced effect. As businesses generate more profits, their workers and owners earn higher incomes which are spent in the economy on other types of goods and services. This additional spending generated by the higher incomes is called the induced effect. This may mean that workers buy more video tapes or a better car or eat out more often. The model indicates that, for the original $ 28 million in artist sales, the additional profit generated by businesses that interact with artists (the indirect effect) would be $ 6.4 million. As businesses generate more profits, their workers and owners earn higher incomes which are spent in the economy on other types of goods and services. This additional spending generated by the higher incomes is called the induced effect. For the $ 28 million in artist sales, non-art-related businesses gain an additional $ 5.2 million in sales. The overall impact of the artists responding to the survey is an additional income to the state of $ 39,785,377 during 2003. This result translates into a total economic benefit to the state of almost $ 49,919 per responding artist. (6) The respondents' sales levels support 411 full-time-equivalent jobs in the artists' sector of the economy. Those sales also generate another 222 positions in other businesses not directly related to the arts. The spending by wage earners, whose additional income is spawned from artist sales, accounts for another 96 full-time-equivalent jobs, making the total job creation or support equal to 729.
The U.S. Census Bureau reports that there were 5,840 artists who made the majority of their income from the arts in Montana as of the 2000 Census. Although many question the accuracy of this number because it was categorized by major income source and does not include part-time incomes, the consensus is that the number is probably understated, not overstated. Extrapolating from our respondent information, the 5,840 artists would generate an overall economic impact of $233,388,545 for the state of Montana.
Table 2: Total Economic Impact of All Artists
Total Sales (extrapolated to 5,840 total)
| Jobs | Economic Impact | |
|---|---|---|
| Direct | 2,411 | $165 million |
| Indirect | 1,301 | $38 million |
| Induced | 562 | $30 million |
| Total | 4,274 | $233 million |
Another component of the economic assessment relates to jobs created or supported by a particular industry. As with dollar value of economic activity, the employment impacts can be separated into direct, indirect and induced effects that result from the art industry in Montana. Using the Census-reported numbers of 5,840 artists in the state, the additional impacts on employment were evaluated. The results are displayed in Table 2.
Expanding the sales numbers to 5,840 artists, the additional impacts on employment were evaluated. Full-time-equivalent positions in the arts sector would total 2,411 while business-to-business transactions would account for an additional 1,301 jobs in businesses that interact directly with arts businesses. The induced effect on jobs is that the additional income spending supports 562 jobs in non-art-related businesses in communities across Montana.
Earlier, it was mentioned that 77% or over $ 21 million in sales, were made to out-of-state purchasers. Table 3 shows the economic impact which results from the extrapolated out-of-state sales to Montana. The extrapolated out-of-state sales support a total of 3,280 full-time-equivalent jobs in Montana and generate an additional $ 179 million in goods and services sold for the state. These employment and goods and services sold figures help to underscore the relative importance of the arts to the state economy. It should be noted that this represents an inflow of additional funds into the state that would not exist otherwise.
Table 3: Extrapolated Economic Impact of Artists' Out-of-State Sales
Out of State Sales (extrapolated to 5,840 total)
| Jobs | Output | |
|---|---|---|
| Direct | 1,850 | $126,511,133 |
| Indirect | 998 | $29,118,256 |
| Induced | 431 | $23,472,325 |
| Total | 3,280 | $179,101,715 |
Artists contribute significantly to the local economies in many areas of Montana, especially in less populated communities. Table 4 shows the total impact on county-level goods and services sold and jobs generated by artist sales within selected counties. Other counties that had respondents are not listed because the small number of respondents might allow for identification of individual businesses or artists.
Table 4: Overall Economic Impact by County Based on Respondent Data Only
| County | Sales | Total Output | Total Jobs |
|---|---|---|---|
| Big Horn | $100,000 | $127,000 | 3.8 |
| Carbon | $438,438 | $556,816 | 14.9 |
| Cascade | $892,052 | $1,284,555 | 34.1 |
| Dawson | $149,266 | $189,568 | 5.1 |
| Deer Lodge | $250,000 | $310,000 | 8.5 |
| Flathead | $2,705,457 | $4,004,077 | 104.3 |
| Gallatin | $9,228,048 | $13,657,511 | 352.8 |
| Jefferson | $202,100 | $262,730 | 6.9 |
| Judith Basin | $107,893 | $131,629 | 3.7 |
| Lake | $400,583 | $520,758 | 14.2 |
| Lewis and Clark | $1,605,632 | $2,312,110 | 61.9 |
| Liberty | $162,000 | $194,400 | 5.5 |
| Lincoln | $223,441 | $268,129 | 7.6 |
| Madison | $176,675 | $212,010 | 6.0 |
| Missoula | $6,130,840 | $9,073,643 | 238.3 |
| Park | $2,287,350 | $3,293,784 | 86.0 |
| Powell | $110,628 | $141,604 | 4.1 |
| Ravalli | $454,875 | $582,240 | 16.8 |
| Silver Bow | $123,400 | $172,760 | 4.6 |
| Stillwater | $121,709 | $157,005 | 4.6 |
| Teton | $245,545 | $316,753 | 8.6 |
| Yellowstone | $1,168,140 | $1,740,529 | 45.4 |
Artists that sell out-of-state bring additional dollars into counties in Montana. As with total sales, respondent data has been extrapolated at the county level to estimate the amount of out-of-state dollars that may be flowing into Montana communities. The underlying assumption is that the respondent data on the county level is a representative sample of the county's artist population. Table 5 indicates the potential level of out-of-state dollars flowing into Montana counties from artist sales.
Table 5: Extrapolated Out-of-State Artists' Sales by County
| County | Estimated out of state sales by county |
|---|---|
| Broadwater | $315,824 |
| Carbon | $1,545,786 |
| Cascade | $3,146,060 |
| Choteau | $219,650 |
| Dawson | $369,725 |
| Deer Lodge | $756,210 |
| Flathead | $6,787,938 |
| Gallatin | $35,530,980 |
| Hill | $420,011 |
| Jefferson | $698,600 |
| Judith Basin | $639,702 |
| Lake | $1,344,875 |
| Lewis & Clark | $8,516,991 |
| Lincoln | $928,756 |
| Madison | $645,355 |
| Missoula | $27,966,799 |
| Park | $10,072,155 |
| Powell | $522,441 |
| Ravalli | $1,870,255 |
| Silver Bow | $493,154 |
| Stillwater | $505,399 |
| Sweet Grass | $230,021 |
| Teton | $587,617 |
| Toole | $376,244 |
| Yellowstone | $4,803,842 |
An estimation by county of output generated and jobs created or sustained is displayed in Table 6. These estimates are based on the extrapolated numbers of artists on a county level and assume that artists within that county will have an average earning level similar to that reported by survey respondents.
Table 6: Extrapolated Total Output and Jobs by County
County figures revised 4-15-05 by MSU Billings Center for Economic Research. Original data assigned some towns to the wrong counties. This has now been corrected. There was no change to cumulative totals for the state, however.
| County | Extrapolated Sales | Extrapolated Output | Extrapolated Jobs |
|---|---|---|---|
| Big Horn | $628,550 | $818,373 | 17.7 |
| Broadwater | $335,489 | $436,807 | 13.7 |
| Carbon | $3,149,490 | $4,464,402 | 80.5 |
| Cascade | $5,716,938 | $8,403,898 | 146.2 |
| Chouteau | $335,227 | $436,466 | 13.7 |
| Custer | $246,033 | $322,303 | 10.1 |
| Dawson | $469,106 | $625,553 | 12.0 |
| Deer Lodge | $942,826 | $1,187,960 | 24.1 |
| Fergus | $521,697 | $679,249 | 15.0 |
| Flathead | $17,005,163 | $23,390,602 | 435.8 |
| Gallatin | $45,475,674 | $62,551,790 | 1163.8 |
| Hill | $497,812 | $663,832 | 14.5 |
| Jefferson | $1,340,873 | $1,773,975 | 34.3 |
| Judith Basin | $678,159 | $904,325 | 17.3 |
| Lake | $2,727,688 | $3,436,887 | 69.7 |
| Lewis & Clark | $9,924,003 | $13,546,265 | 254.7 |
| Liberty | $678,834 | $883,842 | 27.8 |
| Lincoln | $1,404,439 | $1,858,073 | 35.9 |
| Madison | $1,388,114 | $1,894,776 | 35.5 |
| Missoula | $39,205,602 | $60,102,188 | 1002.4 |
| Park | $15,061,774 | $20,084,876 | 385.1 |
| Powell | $579,461 | $754,458 | 14.8 |
| Ravalli | $3,002,075 | $4,476,093 | 76.8 |
| Rosebud | $315,061 | $420,134 | 8.1 |
| Sanders | $273,109 | $344,117 | 10.8 |
| Silver Bow | $818,722 | $1,212,118 | 21.9 |
| Stillwater | $765,002 | $1,020,131 | 19.6 |
| Sweet Grass | $394,730 | $513,938 | 16.2 |
| Teton | $1,543,374 | $2,058,089 | 39.5 |
| Toole | $455,699 | $607,675 | 11.7 |
| Yellowstone | $7,423,034 | $11,925,104 | 191.8 |
| Other Counties | $386,198 | $1,605,386 | 50.5 |
| TOTAL | $164,368,792 | $233,403,685 | 4,273 |
(5) Minnesota IMPLAN Group, http://www.implan.com
(6) Total economic impact divided by the number of responding artists.
