I took down my previous post on the economic impact study by a couple of Bradley professors because I unfairly portrayed them as being uncooperative and unwilling to back up their numbers. They have both contacted me and assured me that they will be happy to meet once they’re both in the country and can coordinate their schedules. My apologies to them for implying they were stonewalling me.
In the meantime, it appears I’m not the only one wondering how they came up with such impressive numbers in favor of the museum. (Last week, they held a press conference where they announced the museum and Cat visitor center would create 1,100 jobs during the two-year construction phase, 90 jobs per year after construction, and $572 million in economic growth over 20 years.) The chairman of the economics department at Knox College is skeptical of those numbers, too.
Richard Stout is the chairman of the economics department at Knox College in Galesburg. Though he hasn’t read the economic impact study, he said he has some questions about how the study drew some of its conclusions. He was skeptical about how the $572 million of economic growth over 20 years figure was calculated. For one thing, included in that figure is the $136 million cost of the project and estimated additional spending that would be created because of it.
“You can’t say the cost of construction is not a cost, that it’s an economic benefit. The cost of construction is a cost,” said Stout, who also questioned how the museum’s operating expenses through the years would also be tallied as an economic benefit to the region.
I also found this interesting. The Bradley professors told me that they weren’t “e-mailing out [their] spreadsheet work on Build the Block at this time.” But according to the Journal Star article, “The summary mentions a copy of the report will be filed with the Peoria County Clerk’s Office and available for sale. It has not yet been filed, according to Scott Sorrell, assistant to the county administrator.”
Once it’s filed with the County Clerk’s office, doesn’t it become a public document? How can it be available “for sale”? Couldn’t a person just FOIA it? Who would get the money from such a “sale”? If I write my own report on Build the Block, will Peoria County sell my report on consignment as well? Perhaps this was just a typo, and the “sale” referred to is simply photocopying charges, as allowed under the Freedom of Information Act.
Perhaps you misunderstood. Perhaps he said the report was so lengthy that it was available for use as a sail.
BTW, CJ, I registered my not only questioning but outright rejecting of their numbers…
I think they mean photocopy costs. The county can only recover costs, they can make money.
Lakeview Museum of Arts and Sciences
Peoria
Primary Type: Planetarium – Secondary: Specialized museum
http://www.lakeview-museum.org/ [BORING WEBSITE]
An American Association of Museums survey found that the median cost for museum admission is $6, but that more than one-third charge no admission at all. On average, visitors spend an additional $1.55 in museum stores and $.81 for food service. This earned income, however, covers only a fraction of a museum’s cost of serving its visitors.
The median cost of serving a visitor is $23.35. A museum’s earned income generates only about one-third of this amount. Private charitable donations are the largest source of operating income for museums (about 35%). Government funding provides just under 25%, and investment income about 10%.
The above is a 2006 statistic, one can only assume overall costs have risen…………….
“IMAX on track to grow throughout 2009
Posted by danpetitpas on December 19, 2008 am31 7:45am
Shares of IMAX Corp. have been rising from its year-to-date low as the company has been adding screens and is locked in to run the biggest blockbuster films of 2009.
Over the weekend, 12% of the grosses of “The Day the Earth Stood Still” came from IMAX theaters, for a per screen average of over $30,000 compared to the national average of only $8700. Nineteen of the top 20 grossing theaters were IMAX theaters with ticket prices 25% to 40% higher than the average.
Box office results similar to this one throughout the year has consistently demonstrated the strength of the IMAX brand and the fact that the public is willing to pay a premium to see movies in IMAX theaters.
While predictions for next year are rosy, IMAX will face challenges down the road. It only holds a slight technological edge in the digital projection market and any theater with stadium seating willing to double stack two 4K digital projectors and beef up its sound system could create a similar viewing experience.
Also, IMAX is facing a class action suit in Canada claiming it cooked its accounting books in 2005 by listing revenue from deals not yet finalized, but IMAX says it followed standard accounting proceedures.”
“Nineteen of the top 20 gross theaters were Imax theaters, with ticket prices apparently running 25 percent to 40 percent higher than the average.”
——————— These are indeed wonderful stats, but……..the top grossing IMAX theaters were all showing current Hollywood releases. Regal Cinemas’ CityPark 20 & IMAX Theater in Lincolshire, became one of the top five grossing movie theaters in the state of Illinois however, Regal Cinemas is a huge corporate entity with MONEY to INVEST, etc.
I think someone previously posted the percentage of the budget for the big Chicago museums (MSO, Field, Shedd) that comes from Admissions. It’s nowhere near the amount needed to cover their costs, and those museums brings in millions of visitors from all over the world. No, folks, the people of London and Paris are NOT aching to come to the Peoria History Museum. To be perfectly honest, very few people outside of the immediate Peoria area give a rat’s you-know-what about Peoria’s history, and some of the people who live in Peoria don’t either.
CJ:
The price of the museum report? Don’t think of it as a “cost;” we all know it’s an economic benefit.
🙂
Hey CJ,
Do you have any background in economics?
I think it’s great that there are people out there to question the data and I agree that this information needs to be available to the public (and it will be). I also believe that this information needs to be explained and taught to the public, which is what Dr. Scott and Dr. Lewer seem to want to do with it.
Do you think that data on a spreadsheet would make any sense to a person without any background in economics or math?
The professors are smart not to email their spreadsheet to you, what do you think you could do with the data? Pull out one number that doesn’t make sense to you and write about how radical it seems? Yea, right.
I think your first blog about the two professors refusing to meet with you and you implying that the data has no actual backing was ridiculous. I’m glad you took it off. How backed is your information, you just quoted the chairman of economics at Knox College even though he hasn’t read the study by the two Bradley professors! Of course there are going to be questions. There has to be.
Also, if you do love your city like you say you do, I think you’re fighting on the wrong side. This museum is going to create jobs, money, and add value to Peoria. Not to mention, the great opportunity to attract more people to your city and provide an educational experience to kids (and adults).
““You can’t say the cost of construction is not a cost, that it’s an economic benefit. The cost of construction is a cost,” said Stout, who also questioned how the museum’s operating expenses through the years would also be tallied as an economic benefit to the region.”
I think…
If it wasn’t a cost, then there would be no exchange from the holder to the recipient. If one party holds it, there is no economic benefit as there is no economic activity. But, in exchanging the benefit for the cost, wealth transfers. This is a Philanthropic effort (defined as the practice of contributing personal wealth to charitable or similar causes) so…Lets say it another way. The opportunity cost of not constructing the museum is $572 million. I’m not sure why Mr. Knox doesn’t see that.
Oh yeah, he hasn’t read it, so he’s offering a critique on something sight unseen. Real professional.
Key terms:
Transfer of wealth
Philanthropy
Opportunity cost
Professionalism
Gator,
It is true…we should wait and see just what data the BU professors were using, and how they developed their conclusions. Was this truly an INDEPENDENT STUDY on their part, with data/research acquired by them? The PRM has conducted several studies on its own, each new study showing the museum having an even greater economic impact than the last study! Remarkable. Did PRM hand over their data to the professors? If so, their assessment of the museum was bound to be …’positive?’
If I am wrong, I will admit it.
You obviously did not read my posts or any of C.J.’s previous posts on the subject. I challenge you, the BU guys, the PRM people, or anyone to find a museum of comparable size, population, function, etc. that is doing for it’s ‘community’ what everyone says this project will do for Peoria!
Once the construction is complete just where will all of these jobs come from? Twelve full-time and 30 part-time employees…maybe some other support staff?
“Do you think that data on a spreadsheet would make any sense to a person without any background in economics or math?”
– Maybe not………………but tell me……what do either of the esteemed professors know about museums? I am not questioning their integrity, and I am sure they are ‘tops’ in their field. There are any number of ways to bring culture, art, education, etc to Peoria, without costing 100 million+ dollars and becoming another burden on the taxpayer.
Your representation of opportunity cost is not accurate. First and foremost because the $140 million going to the construction of this facility is not going to evaporate. So at the very most you could say that the opportunity cost is POTENTIALLY $432 million. If you want to base the decision as whether to build the museum project or not on opportunity cost I can think of a lot better ways for the area to invest $140 million dollars for 20 years. I don’t think that kind of analysis is really going to help anyone arguing for the museum.
The point Stout was making is that you cannot figure the cost of of the benefit as a part of the economic benefit itself. That would be like opening up your savings account statement at the end of the year to learn that you made $30 of interest off your $1000 balance and claiming you made $1030 from that transaction.
You don’t need to analyze the in-depth numbers to identify the error in their claim, there was enough information in the reports available through the press to do so.
And just so you can’t use this excuse against me, I have done graduate school work in economics. And I still want the museum built, but that doesn’t change the fact that this report isn’t entirely accurate.
Ed,
Did you forget to address Stout’s entire statement?
“…Stout, who also questioned how the museum’s operating expenses through the years would also be tallied as an economic benefit to the region.”
There is a difference between “philanthropy” and “TAX.”
One is FREELY given.
11Bravo,
the cost of construction needs to be included because it represents income growth for those who receive payment for construction. i’m not arguing with you or challenging anyone’s interpretation of economic theory. if anything, i’m being honest about my assumptions and putting them out there for challenge.
and, no, NV, I didn’t forget it. you changed the definition i specifically used in my post to fit your needs.
http://wps.prenhall.com/wps/media/objects/213/218150/glossary.html
…just happened to be in the glossary I pulled from my bookmarks.
look, arguing about economics is like arguing about global warming (or climate change if you prefer), or evolution, or whatever. you put your side of the argument up, i put my side of the argument up and no body, in the end, knows what to do with any of it. I don’t really feel like arguing whose phallic fundamentals are larger. My main point was that I thought it in poor taste of the Knox professor to challenge something unread; which I could also be wrong about. He very well could have read it.
i think i’ll just go back to education reform 🙂
i also will be voting early, and often.
No,no,no… It does NOT get counted. Yes, it generates income for those who receive it. BUT, it is merely transferred from other individuals. Think of it like this. We have two fish bowls. One is the Peoria area, for which we hope to develop economic benefit which we will call fish food. There is 5 grams of fish food in the Peoria bowl. No matter where in the fish bowl we move it or whatever fish we try to feed it to, there is never more than 5 grams of food in the bowl. We have not created any additional fish food, see economic benefit, for the Peoria bowl. However, if we can take some fish food from the other bowl and put it in the Peoria bowl THEN we have created additional fish food for our bowl.
You cannot generate economic benefit for a fixed region if all you do is move a fixed amount of assets between the same fixed population.
Also Ed, NV didn’t misrepresent the definition at all. His point was you are calling a proposed tax increase, which is required for the project to succeed, philanthropic. You are ignoring the definition you specifically cited because as NV pointed out a tax is not “contributed for charity” it is taken by the government.
Gator: No, I don’t have any background in economics. And I didn’t ask the professors for a spreadsheet. Like I told the professors, normally with studies like this involving municipal governments, there is a background document or white paper that explains in layman’s terms what the raw data was and where it came from, and what methods they used to analyze that data. If you Google “museum economic impact study” you can see numerous examples of this. That is what I asked for. The response I got was that they weren’t e-mailing their spreadsheet.
As for your contention that I’m fighting on the wrong side of this, I of course disagree. You say:
That’s an argument for a museum, not an argument for this particular museum plan. And it’s certainly not an argument for a sales tax increase. If there were a better museum plan at a lower cost, wouldn’t that be a better use of private and public funding?
Gator, you don’t have to be a proctologist to recognize crap when you see it.
11bravo;
Oh the HORROR, I can’t BELIEVE how right you are. It’s SO amazing how wrong I could be.
Will you EVER forgive me?
Look, we disagree. Your graduate school class notwithstanding, you’re responding to closed-ended comments in a blog. It doesn’t make you correct. It makes me lazy an unwilling to go into detail and argue with you.
Once again, and finally, my two main points:
1. I think arguing about economics is like arguing about global warming (or climate change if you prefer), or evolution, or whatever. you put your side of the argument up, i put my side of the argument up and nobody, in the end, knows what to do with any of it. It’s like arguing about whether or not tax cuts are stimulative; of course they aren’t but there is a whole bevy of people who disagree. There are reasons to include it.
2. I thought it in poor taste of the Knox professor to challenge something unread. Just as most of us are doing.
Have fun, professor.
It would seem that ‘anon’ and ‘crap’ go together. The ONLY economic study that supports the PRM proposal is the one THEY came up with. Go figure……………….
Ed,
Are you getting bitter? Your posts on the Dist 150 ‘issue’ are excellent. One would think that given your passion for Dist 150 and serious education, you would rather see time and money used to clean up the district. I know that I am oversimplifying the Dist 150 problem.
Everyone who supports the museum has the “build it and they will come” attitude. The [international] economy is going to have to come out of its nose-dive. Get the CAT people back to work, ‘fix’ Dist 150, develop downtown accordingly [urban plan], and maybe even build a museum [utilizing a different project plan]. This will get Peoria back on the map.
Hells Bells, maybe we could get rail service [hello LaHood]?!?
NV
No, and I must apologize (again, I really don’t know why I flit with incivility in my posts) for my tone above.
Couple of things come to mind. I really think but for the 40MM in direct public funding, the rest can be considered opportunity cost, so 11bravo writes $432MM, I write $532MM; I’m willing to come off $572MM, but, those are theoretical arguments.
The second, to your point earlier, the reason I see the philanthropy v. tax issue differently, and why I posted the definition I did and why I disagree with 11bravo, is because of the public’s role in its establishment.
If the majority, speaking for the whole, establishes a transfer of economic resources toward what is generally a quality of life issue for the whole, I viewed that as philanthropic.
More specifically, the majority (voters) is deciding whether or not you or I will donate our incremental sales tax dollars toward a museum. If the city would come out and say, we’re unilateraly bumping up the sales tax by a home rule vote then I would agree with you both 100%, but it’s not. It’s me, you, and our neighbors who will decide.
OK………………
A ‘Yes Vote’ to sales tax = philanthropy.
That is really reaching, but I believe I see your point.
One interesting note; for people with ‘wealth,’ philanthropy = tax write-off…….[Ha].
The PRM touts the substantial economic impact this museum will have on the area, but what will [most] of the averages taxpayers REALLY have to gain or loose with THIS project?
I know this does go on……………………….
well, you *can* write off your sales taxes if the sum is greater than your state income taxes…
i was able to deduct my sales taxes in lieu of income taxes because the combination of table generated and non-titled goods sales taxes were more than what I paid in income taxes.