Economic impact studies based on short-run spending injections and multipliers lack conceptual ties to measures of economic surplus, fail to capture intangible benefits and generally fail to measure costs. In this case study of the Eurovision Song Contest (ESC) held in Israel in 1999, national benefits from the government-financed televising of the ESC are measured as producer surplus (approximated by private sector incremental profits), consumer surplus (measured as the incremental willingness to pay for an event staged at home) and government surplus (linked to national implicit benefits in the form of promotional advertising cost savings). The opportunity costs of diverting resources to this particular televised event are expressly included as an offset to these gross surplus benefits. Despite the conservative approach, the results show moderate social justification for public support of this high profile televised spectacle and suggest that a cost-benefit approach to cultural events can have wider applications.
Bibliographical noteFunding Information:
Funding for this research was provided by the Israeli Ministry of Tourism. The authors would like to thank the referees for constructive comments on earlier drafts that contributed greatly to the coherence of this work.
- Cost-benefit analysis
- Economic surplus
- Eurovision Song Contest
- Televised events
- Willingness to pay