OECD Culture and Local Development.pdf - PACA

ANNEX 1
• The nature of activities: the higher the production share of local employment,
the higher will be the indirect and induced effects, and hence the multipliers
for museums will be greater compared to those for theatres (see table 2).
Annex 1.2. The ad hoc multiplier
The ad hoc multiplier attempts to specify the previous data using possible
behavioural differences between tourists within the territory. According to Archer, this
is defined by:
K = S j=1
N
S j=1n Q j K ij V i . 1/ (1 - c S X i Z i V i )
where:
• j represents the different categories of tourists ( j = 1 … N),
• I represents the different types of businesses (i = 1 … n),
• Q represents the proportion of total tourist spending by tourists of type j,
•K ij represents the proportion of spending by tourists of type j in enterprise
category L.
•V i represents direct and indirect revenues generated per unit of expenditure
by businesses of type i,
•X i is the proportion of total spending by local residents to the benefit of
business i,
•V i is the proportion of spending that benefits the territory,
• c is the marginal propensity to consume.
Annex 1.3. The input-output multiplier
This multiplier analyses the territorial development effects of cultural spending
using relational techniques that associate different sources of production in the
territory, thus bringing great accuracy to the conclusions 123 . The main difficulty in using
this multiplier is to distinguish clearly between initial expenditure effects that will
be felt in the territory and those that will be felt outside the territory, which requires
a detailed analysis of the expenditure flow sector by sector.
The local economy is represented in the form of an inter-industry flowchart
(Table1). In the initial matrix, which constitutes the upper left portion of the table,
each vector-column represents purchases of goods and services from other sectors
of the local economy, and each vector-line represents sales of goods and services to
other sectors of the local economy. These exchanges define intermediate consumption.
To this we must add a lower left quadrant that represents factor purchases and
payments (wages, profits, taxes, imports). The upper right quadrant represents final
CULTURE AND LOCAL DEVELOPMENT - ISBN 92-64-00990-6 - © OECD 2005 179