Tips from the Field
Local festivals and community events do more than draw a crowd. They generate economic activity for both the businesses and households throughout the region. But how do you measure impact in a credible way?
Economic impact has three layers. Direct effects are the initial change in the economy — for festivals and events, this is spending by attendees, both at the event itself and at nearby businesses. Indirect and induced effects capture the ripples from there.
The ripples capture economic activity at businesses throughout the region, even those that never see a single festivalgoer. A local accountant, for instance, may have no festival visitors as clients, but they may serve a restaurant owner who does.
What is economic impact?
Economic impact measures the total change in economic activity resulting from an event or investment. It includes direct effects (initial spending), indirect effects (business-to-business activity that spending generates), and induced effects (spending by employees whose wages depend on that activity). Together, these are often referred to as the “multiplier effect.”
1. Be clear on what you’re measuring
For many community events, capturing direct effect (i.e., attendee spending) alone is enough to make a compelling case for the value of a festival or event. If you want the full picture of impact, however, you will need an input-output model like IMPLAN, which calculates indirect and induced effects.
Tip: Before launching a study, decide what level of analysis your community actually needs. Knowing your purpose upfront (e.g., grant reporting, sponsor recruitment, budget planning) will help you invest the right amount of time and resources.
What is IMPLAN?
IMPLAN is an input-output modeling tool widely used by economists and researchers to estimate how spending in one part of the economy affects other sectors. It draws on industry specific data to calculate indirect and induced effects.
2. Count your visitors carefully and have a plan
For some situations, determining the number of visitors is simple. Ticketed events make it easy to track attendance. Events with open gates — some county fairs or art festivals, for example — make attendance harder to measure. There are five main approaches:
- Ticketing and/or registration counts
- Gate counts
- Crowd counts
- Sky counts
- Mobile analytics
Several of the approaches require a plan to count attendees. This is often accomplished through scheduled counts. For example, volunteers count people coming through entries for the first 15 minutes of each hour.
A sampling plan ensures you are collecting information at different times during the festival or event, since attendance might be high on Saturday morning and low on Sunday afternoon. There is always a tradeoff, however, between counting effort and accuracy. Having more counting sessions will increase accuracy, but it also requires more resources.
Tip: Build your counting schedule before the event, not during it. Map out your entries, assign volunteers to specific windows of time, and designate someone to track whether counts are actually happening as planned.
3. Survey visitor spending
Economic impact studies typically use a visitor survey to determine spending per person. Survey approaches can vary depending on the type of festival or event:
- In-person intercept (paper and pencil or electronic): Surveyors are recruited to intercept people at the event. The strength of this approach is that the number of surveys can be controlled - you hire a surveyor to collect 15 surveys and they keep working until they reach that number. The tradeoff is that you need to recruit and coordinate enough people, whether paid or volunteer.
- Online: This method works well if you have access to email addresses or social media accounts that reach the visitor population. While it is easy to deploy, you cannot control the number of responses and have to guard against sampling bias (e.g., certain ages might be more present on Facebook versus TikTok).
- Hybrid: A combination of both approaches.
As with visitor counts, a sampling plan is critical. Visitor spending can vary significantly based on the time of day and day of the week. If your festival spans multiple days or activities, collect surveys across all of them. A town celebration with a Saturday night concert and a Sunday afternoon parade will likely attract visitors with very different demographics and spending patterns. To ensure statistical accuracy, Extension recommends setting a target of collecting 400 surveys, depending on the size of the event.
Tip: Do not launch your survey without a sampling plan. Map out when and where you will collect surveys before the event begins, and track your progress during the event so you can adjust if a particular time or location is underrepresented.
What is sampling bias?
Sampling bias occurs when the people surveyed don’t accurately represent the full population of attendees. For example, only surveying people near the main stage or only collecting surveys on Saturday night could skew your spending estimates. A good sampling plan distributes survey collection across different times, locations, and visitor types.
4. Train your team before you start collecting data
The local coordinator is a critical person in the process. Extension strongly recommends identifying someone — a hired coordinator or an organized staff member — who has strong community connections, is responsible and detail-oriented, and can track the project on the ground. This person should be trained on their role and responsibilities before the event.
Surveyors also need training. While collecting surveys seems straightforward, there are important criteria and best practices. For example, a female surveyor might feel more comfortable approaching female attendees, but to avoid bias, males and females should be surveyed equally.
Tip: Treat coordinator and surveyor training as a required step. The quality of your data depends on consistent, unbiased collection, and that requires people who understand why the protocol matters, not just what to do.
5. Share what you find
The need to have a plan and incorporate proper methodology does not end when the data is collected. There are critical steps to follow when translating the raw data into summary data to share with the community. Additionally, a well-written report summarizing the results helps your community understand and act on the findings. Economic impact data is most valuable when decision-makers can actually act on it.
Tip: Think about your audience before you write. A report for a grant funder looks different from a one-pager for a city county presentation. If you have multiple audiences, consider creating more than one format.
Learn more about economic impact analysis of festival and events
Festivals and events create community pride in what makes a place unique and special, and people continue to seek experiences and things to do. But hosting a successful community event requires exploring many considerations. Festival and event organizers face challenging questions, such as:
- Are visitors from outside your community spending money during the event?
- How are local businesses benefitting from your festival or event, even if event visitors do not patronize the business?
- What marketing strategies will help you sustainably grow your event?
- How do you manage an event’s financial health and sponsor relationships?
- How do you implement health and safety protocols going forward?
How can Extension help?
Extension has conducted dozens of economic impact studies for festivals and events across Minnesota — from local community events like the Henderson Classic Car Roll-In to events with a national draw like Grandma’s Marathon. We offer economic modeling, survey design, sampling strategy, data analysis, and reporting. We can also train local coordinators and surveyors.
In addition, Extension, in partnership with University of Minnesota Duluth, has recently created a Community Impact Snapshot tool for festivals or events. If data collection is an obstacle for your festival or event, this may be an option for your community.
To learn more, contact Brigid Tuck or Xinyi Qian. You can also reach out to your local regional educator.