Museum of Natural Sciences

There are a large variety of methods to measure the value of museums. Some are moreappropriate,somelessso,depending on what you want to measure and on the nature of the museum. You have to take care that the results don’t box you into a sector in which you don’t want to be measured by your stakeholders and politicians.

Why measure the economic impact of museums? There are outward rationales: communicating your values to the public, stakeholders, politicians, press – but also inward rationales that affect strategic decisions in your organisation on how to organise processes and what to put emphasis on. The research methods and techniques can be confusing for non- specialists in this field. There are, broadly speaking, three different lenses though which you can look at economic impact:

1. Financial impact

There is a range of methods quantifying and measuring different expenditure streams (staff costs etc.), and looking at the indirect and induced impacts of these. If you use these for museums, you will end up with a small number, even for large organisations, because museums are quite small in terms of turnover compared to other organisations. You will never produce a headline-grabbing number to funders. But museums attract lots of visitors, so in addition you can measure what is spent by museum visitors in the surrounding economy, in accommodation, restaurants and shops (it can be difficult, however, to work out what is genuinely additional spending that was incurred only by the museum visit). An approach that combines the two methods described above is the most commonly used one. But there are other methods:

2. Place-based impact assessment

Assessing how the city or surrounding area is impacted by the museum. This is often connected to the theme of (urban and rural) regeneration. There are many positive consequences to having a museum, such as improving the image of a city, driving footfall and generating a sense of liveliness. Positive benefits that flow from these can be higher rental yields for neighbouring properties, more shops and greater takings, more jobs, reduced crime and greater safety. Results like these are interesting to local government funders, but this is the least used of all methods, because the ndicators are less clear and straightforward and it also requires longitudinal research overalongperiodoftime.Regenerationis a long-term business that can take 15 to 20 years or more; in the interim there are few immediate outcomes and conclusions.

3. The total value approach

This encompasses methods that try to put a financial value on things that don’t have a ready financial value, such as wellbeing, learning, cultural enrichment and even the value non-users place on having a museum in their town or city. It explicitly tries to quantify, for example, social and learning benefits. Both the cost-benefit approach and the total economic value approach try to demonstrate that final monetary value is an exchange between the costs incurred and the benefits obtained. These could include non-used values, like the value of the existence of a museum (i.e. people just value having the museum in their neighbourhood; even if they don’t go themselves, they value the fact that others can visit it or they may hold the view that they will go in the future, when they have a family for instance).

Total economic value approach

You can work with revealed or stated preference methods; one positive aspect is that government economists are familiar with these methods because they are used in other policy areas, particularly those that look at non-market goods such as environment. But this approach is extremely demanding in its technique. It requires highly skilled researchers, large- scale primary research and multiple cohorts of users and non-users. Outcomes of the research can also be quite abstract, as the final output is often just one big figure split between use value and non-use value, and it is not possible to know what has actuallygeneratedthesefigures(e.g.which of the museum’s services in particular, for example, do people value?). Frequently, the non-used value is the biggest value (because there are more non-users than users), but this can create PR problems, because it is hard to advocate that a museum is valued the most by people who don’t visit it. For all these reasons, this method is very rarely used in museums; there are more examples of this method being applied to libraries and heritage sites.

Financial impact method

There are both existential and technical reasons as to why you might not want to use the financial impact approach. If the museum is interested in valuing what local people get from the museum, this is not the right method. It works best if the museum gets lots of external visitors and most of them are tourist visitings, because it is this group that spends more in the local economy as part of the visit and this spending is also more likely to be genuinely additional expenditure.

Socially adjusted cost-benefit analysis

Social Return on Investment (SROI), is a form of socially adjusted cost-benefit analysis. This method is quite popular in the charity and voluntary sector. It helps museums understand what their stakeholders and community value about them and how they think the museum has a social impact.
The method then requires an identification of which of these values are quantifiable, which are the most important, and what the financial proxies are that can be used to estimate these (social) values and impacts. For charities, museums and the wider cultural sector, much of the social value they create is generated through helping to forgo expenditure on the social costs of ‘failure’. That is, if a museum can positively affect people dealing with mental health issues or unemployment etc., then money that the state would otherwise spend(e.g.unemploymentbenefit)canbe avoided if, for example, a participant in a museum programme is able to find a new job through the programme. This method requires a combination of primary data collection and user analysis, plus analysis of secondary data, which establishes proxies and measures how the positive change that has happened to the user can be attributed to your particular museum (and not, for example, to social services or the theatre or anything else that helped the user feel better). Again, extensive research is required.

Broadly speaking, this technique is much more effective when there is a very clear intended outcome. However, this is not the reality for most museums, because they have a much broader offer that is aimed at the general public. Therefore, this method is best applied in museums to measure the value of participatory programmes targeting specific groups.

How do you decide what method applies best to your museum?

There are two main dimensions to the decision: strategic and operational. Strategically, a museum needs to know what it wants out of the study but also has to balance this against what it knows its main funders and stakeholders would want and the kind of evidence they would like to see. Operationally, a museum needs to consider what can best be achieved in terms of research quality and comprehensiveness, balanced against the inevitably limited time and resources that will be available to conduct the research.

Money matters: The Economic Value Of Museums Annual conference publication 2016
Sustainable Science Center Business Models article from Ecsite 2017
Attractions Management Issue 2 2016

Amsterdam Museums Monitor 2016

SMG Annual review 2016-2017
ASTC Science center statistics 2013
ASTC Science center statistics 2016

Heureka  Annual Review 2016
AHHAA Annual review 2016
Exploratorium Annual Review 2016

The Navy Yard, Yale and Oosterdok. New Perspectives NEMO district development plans
An Open-Space Museum as a Testbed for Popularity Monitoring in Real-World Settings