Economic Impact of Arts and Culture in St. Petersburg

This report presents an analysis based on the input-output method to estimate the economic impact of the arts and culture business cluster in the Saint Petersburg area. The method consists of considering the economic linkages between the various sectors which cause every dollar of expenditures to ripple through the local economy resulting in every dollar of expenditures being multiplied to various degrees. The outcome is a larger economic effect than the initial expenditure. These multiplier effects continue to contribute to the economic impact of the expenditure until the effects leave the area of study or become too small to measure. If, for example, a tourist from another state spends a dollar in the local economy, then a local resident receives a dollar of income. In turn, the local resident will spend some of that additional dollar of income on locally produced goods and services. The second round of spending is not as large as the first because some of the income received by the local resident will be saved, some will be paid in taxes, and some will be spent on goods and services produced outside the local area. This reduction in spending in the second round is referred as leakage. Nevertheless, the impact of the initial dollar of spending will be some multiple of the amount of the initial spending. The following sections describe how this analysis is performed and its results