Anatomy of the economic value generated by a cultural event

This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/ licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. Copyright © 2024 The Author(s). Published by Vilnius Gediminas Technical University ISSN 1611-1699 / eISSN 2029-4433 2024 Volume 25 Issue 4 Pages 828–848 https://doi.org/10.3846/jbem.2024.22066 ANATOMY OF THE ECONOMIC VALUE GENERATED BY A CULTURAL EVENT Luis F. AGUADO 1, Jesús HEREDIA-CARROZA 2, Aaron ESPINOSA-ESPINOSA 3, Paola A. GARIZADO-ROMÁN 4, Henry DUQUE-SANDOVAL 5 1,5Economics Department and Full Wealth, Center for Applied Research, Pontificia Universidad Javeriana Cali, Colombia 2Economics and Economic History Department, Universidad de Sevilla, Sevilla, Spain 3Institute for Development, Economics and Sustainability Studies – IDEEAS, Universidad Tecnológica de Bolívar, Cartagena, Colombia 4School of Business, Universidad Autónoma de Occidente, Cali, Colombia Article History: Abstract. The article measures the economic effects of decisions made by two agents in the cultural and creative sector. Managers of a cultural event decide to produce it: it mobilizes a flow of artists and creatives who materialize their creations. Individuals decide to visit it: it mobilizes a flow of individuals who produce experiences by attending the event. The result is revealed by the economic dimension of the value generated by a cultural event: new income and jobs for the host territory of the event and unique and authentic cultural experiences for those attending the event. The empirical literature has drawn attention to the need for more precise measures of economic value, in particular that do not overestimate. A combination of instruments is used: interviews (n = 6) with event managers/organizers; a face-to-face survey (n = 173) with representatives of commercial stalls; a face-to-face survey of attendees (n = 1,030); and, an input–output model is adapted to the area of impact. The article provides a methodologically useful framework for identifying and estimating more reliable measures of the material (economic) value created by a cultural event, which can be replicated in a variety of events around the world. ■ received 21 September 2023 ■ accepted 27 June 2024 Keywords: cultural events, cultural sector, cultural value, economic value, input–output analysis, Petronio Álvarez Pacific Music Festival. JEL Classification: Z11, R11, R58. Corresponding author. E-mail: [email protected] JOURNAL of BUSINESS ECONOMICS & MANAGEMENT 1. Introduction The value of the original and authentic. A live cultural event (e.g., a festival) is a planned activity, in time and place, through which attendees generate unique and authentic cultural experiences (Getz & Page, 2019, Chapter 2; Cudny, 2016). In short, it represents the essence of a community and its identity with a territory. The value generated by cultural events is multidimensional (Snowball, 2020). The dimensions that integrate it make its empirical estimation complex (Klamer et al., 2022; Devesa & Roitvan, 2022): e.g., aesthetic aspects, spiritual significance, symbolic or historical importance. Indeed, the constituent elements of this value are not easily estimable and apprehensible from an economic point of view (van der Hoeven et al., 2021; Hutter & Frey, 2010). However, the activities derived from the production and Journal of Business Economics and Management, 2024, 25(4), 828–848 829 consumption of cultural events contribute to and stimulate the achievement of economic results (Rodrigues-Ferreira et al., 2023; Cerisola & Panzera, 2021). The article presents methodological elements to measure the economic value attributable to the celebration of a live cultural event on the territory where it takes place (Seaman, 2020). By live cultural event we refer to a feast, fair, festival or carnival that expresses aesthetic, spiritual, symbolic or historical aspects of people, groups or societies (Cudny, 2016). And, by territory, to the city or region where the event takes place (UNESCO & World Bank, 2021). The economic value is measured from the market transactions derived from the decisions of two agents of the cultural and creative sector (Organization for Economic Co-operation and Development [OECD], 2023a; Pereira et al., 2023). On the supply side, the managers of the cultural event decide to produce it, which means mobilizing a flow of artists and creatives who materialize their creations. On the demand side, individuals decide to attend it, which means mobilizing a flow of people who produce their experiences by attending the event. The result is expressed in new income and jobs for the economy of the host territory and in unique and authentic cultural experiences for the attendees. The measurement of economic value is based on the cultural cycle, proposed by UNESCO (2009), which shows the stages through which the cultural event adds value to society and the economy. To measure the stages of the cultural cycle, a combination of instruments must be designed and applied: interviews with event managers/organizers; a survey of representatives of commercial stalls that are part of the event’s activities (e.g. stalls selling handicrafts, typical costumes, traditional food); a survey of attendees (locals and tourists). The effects of transactions, associated with each stage of the cycle, are estimated through an input– output model, adapted to the economy of the host territory, which transforms the sources of demand (expenditure/investment in the organization/production of the cultural event + participation/consumption expenditures) into effects on production, income and employment in the territory (Miller & Blair, 2022; SACO, 2019). The article contributes three findings to the empirical literature on the measurement of the economic value that cultural events generate in the territory that hosts them. First, it refines the empirical tools to capture the economic value, with reliable and not overestimated measures that reflect the economic dynamics that the cultural event impacts on the territory. Secondly, it provides the different agents of the cultural and creative sector with empirical evidence and objective measures on the contribution of cultural events to local development: what is the contribution of a cultural event to the economy of the territory; how many attendees, locals and tourists, generate a unique and authentic cultural experience; how many local artists and creatives does the event mobilize? Third, the methodology developed can be replicated in similar cultural events around the world. As a case study we took the XII edition of the Petronio Álvarez Pacific Music Festival (hereafter, El Petronio) that took place in the city of Cali (Colombia) from August 15 to 20, 2018. El Petronio is the principal and most prestigious cultural event of marimba music, and Afro-Colombian Pacific traditional songs and dances. The Petronio (Aguado et al., 2021) stands out for: i. its local and idiosyncratic character linked to the territory; ii. Its high international recognition; iii. That it represents a perfect synthesis of the complexity of cultural events as it is a combination of activities, forms and contents that give meaning to the festival: music, dance, gastronomy, handicrafts, and typical costumes. The credentials of El Petronio show that it is part of the Intangible Cultural Heritage of the Nation and, in addition, the Afro-Co- lombian music of the Pacific such as the marimba and traditional songs were included in 2015 in the Representative List of the Intangible Cultural Heritage of Humanity by UNESCO. 830 L. F. Aguado et al. Anatomy of the economic value generated by a cultural event The article is organized in the following sections. After this introduction, the literature review on the economic dimension of cultural value and its measurement is presented. The data and the empirical model for estimating the economic value of the cultural event are then presented. Finally, conclusions and references are included. 2. Literature review. The economic dimension of cultural value and its measurement 2.1. Economic dimension of cultural value The value generated by cultural goods is multidimensional, unstable, controversial, lacks a common unit of account and may contain elements that are not expressed on a quantitative or qualitative scale (Petrova et al., 2022; van der Hoeven et al., 2021; Angelini & Castellani, 2019; Throsby, 2003). However, it is necessary to measure it because cultural value is a fundamental concept of both political and economic debates on the arts and creative industries when allocating resources to different cultural manifestations and practices by governments, businesses and the community in specific social contexts (Dimitrovski et al., 2023; Pereira et al., 2021; Belfiore, 2020). The management of the symbolic dimension of a territory is a key element that determines its competitiveness (Santamarina, 2023; Cerisola & Panzera, 2021; Boyd, 2020; Kulenovic & Cech, 2015; Garcia & Judd, 2012; OECD, 2005). The cultural sector currently constitutes the main bet to generate income and jobs focused on innovation, social inclusion and environmental care (UNESCO, 2022). This shows how cultural goods play a dual role in society. On the one hand, they are producers of meanings (Šagovnović et al., 2022; Meeprom & Fakfare, 2021; De-Miguel-Molina & Boix-Doménech, 2021; Alonso-Vazquez et al., 2019). On the other hand, they are sources of development and wealth through their production and consumption (OECD, 2023b). This second dimension reflects their economic value, the capacity to generate income and jobs, which boosts the economy of the territories (Rodrigues- Ferreira, et al., 2023). Cultural goods/events are exceptional, different from others (Greffe, 2010). Keynes (1936, as cited in Moggridge, 1982, p. 344) stated that their consumption contributed to the achievement of a “finer, more gifted, more splendid, more carefree” civilization. The exceptional character is linked to the fact that: (i) they are prototypical, unique, copiable, but not reproducible (e.g., a painting); (ii) they are services, their consumption is not cumulative (e.g., attend a theater performance), (iii) the basis of their value is that they are repositories of messages and stimuli that must be interpreted through images, sounds and signs, this capacity for interpretation is called cultural consumption capital (McCain, 1979); (iv) they are inputs to produce a cultural and creative experience for those who consume/demand them (Stigler & Becker, 1977). The consumption of cultural goods/events implies for individuals to use a part of their time that competes for other uses, paid work in the market vs. domestic work, e.g. cleaning the kitchen; buying goods in the market, e.g. buying a bus ticket to travel to the festival, and the investment made by the individual himself to develop and refine his tastes (Brito & Barros, 2005). Thus, empirically, the process of cultural consumption/participation is modeled as a process of rational addiction generated by previous consumption experiences and the accumulation of cultural consumption capital (Stigler & Becker, 1977; Lévy-Garboua & Montmarquette, 2011). Journal of Business Economics and Management, 2024, 25(4), 828–848 831 2.2. Empirical measurement of the economic value of cultural goods. The cultural cycle and the flow of expenditure The cultural cycle shows the process, activities and actors through which the sector generates value to society and the economy of a territory (Throsby, 2020; UNESCO, 2009; Sung, 2014). This interaction between activities and actors in the sector generates multiple and varied benefits, both individual and social (Devesa & Roitvan, 2022; Matarasso, 1997; McCarthy et al., 2004). Individual benefits are reflected in emotions and feelings invoked by those who participate in the consumption of cultural goods and are positively correlated with their personal well-being, e.g. joy, escape from routine, having a moment to free oneself from the stress of everyday life and the transmission of cultural values. Similarly, in the improvement of new artists’ skills, e.g. innovation in styles. Socially, the benefits are reflected in the preservation, transfer and protection of cultural heritage, employment opportunities for artists, creatives and workers in support sectors for the cultural sector (e.g. transportation, equipment rental) and attraction of tourists to the territory. The cultural cycle makes it possible to analyze the activities and interrelationships involved in the value chain of the cultural good (Figure 1). The cycle starts with a creative idea [initial/original] that then goes through a series of interrelated stages before reaching the final consumer, in this case the individual/citizen who generates his/her experience from consumption/participation. For the case study in this article, a cultural festival, is a way of expressing the intangible cultural heritage associated with the idiosyncrasy and past of the territory, reflected in practices, customs, traditions and assets (tangible and intangible) that over time acquire a symbolic meaning and constitute the essence of the community (Aguado et al., 2021; UNESCO, 2015; Palma et al., 2013). The value of cultural events, from an economic perspective, is externalized and materialized through the new income and jobs they contribute to create in a specific territory (Snowball, 2008). This perspective of the creation of economic value generated by cultural Figure 1. Cultural cycle and expenditure flow of a cultural event. (source: authors’ own elaboration) 832 L. F. Aguado et al. Anatomy of the economic value generated by a cultural event goods can be measured through the cultural cycle as proposed by UNESCO and the flow of spending and mobilization of resources associated with each stage of the cycle. The expenditure cycle shows the connection and interaction between different stages and actors. The latter can be classified into actors in the cultural sector – artists and creatives – and those actors who carry out humdrum activities (Caves, 2000). Likewise, the stages are not necessarily linear and feedback on each other (European Commission et al., 2017). At each stage of the cycle, it is possible to provide a measure of the economic value created. This measure can be approximated through the transactions carried out by the various actors deriving from the production and consumption relations they establish in the market. Finally, these transactions translate into income and employment, which constitute a market measure of the economic value created by the cultural event. 3. Data and empirical model 3.1. Data To provide an empirical measure of the economic value generated by a cultural event, we assess the market transactions associated with stages (ii) Production and (iv) Consumption/ Participation of the cultural cycle (Figure 2). A mix of instruments is used: interviews (n = 6) with event managers/organizers; a face-to-face survey (n = 173) with representatives of the commercial stalls that participated in the event; a face-to-face survey of attendees (n = 1,030) to the cultural event and, an input–output model is adapted to the economy of the city of Cali. In addition, methodological innovations are presented that offer greater accuracy in estimating the expressions of economic value. I. Production budget of the cultural event and its harmonization with the national accounts sectors: The agency in charge of designing and producing the festival each year is the Mayor’s Office of Cali, through the Secretariat of Culture. The latter provided the detailed production budget for the festival. The next step consisted in translating the accounting information, on which the budget is based, into economic information. In other words, the criteria for Figure 2. Sources of information for measuring the economic value of a cultural event. (source: authors’ own elaboration) Journal of Business Economics and Management, 2024, 25(4), 828–848 833 classifying expenses and products used in private or public accounting do not coincide with the criteria used in national accounting: International Standard Industrial Classification of All Economic Activities (ISIC) and Central Product Classification (CPC). Budget harmonization is a key activity for accurately measuring the economic value associated with cultural events. The initial investment constitutes the direct effect on economic activity attributable to the event, so it must be an accurate measure to identify activities and the appropriate multiplier, net of leakage and local resources. Six interviews were conducted with the festival management to establish a detailed description of: a. the value chain of the event, b. the network of suppliers and whether they are located in the city or region where the event is held (impact area), c. the budget structure and expenditure items that allow its homologation with the sectors of the national accounts, d. identify expenditure leakage. II. Survey of commercial stalls: A face-to-face survey instrument was applied to representatives of each of the 173 commercial stalls that participated in the sample of Afro-Colombian Pacific traditional expressions (49 of handicrafts, instruments and design; 48 of traditional and native beverages; 59 of traditional cuisines; 7 of sweets, snacks and soft drinks; and 10 of hairstyles and cosmetics). The survey made it possible to describe the types of services/ products sold at the stall, as well as whether the business currently operates in a municipality other than Cali, whether it purchases inputs in a municipality in the Pacific region, how many people work by type of employment (creative, humdrum), among other relevant information. III. Attendee survey1: Expenditure/consumption of attendees was obtained from a questionnaire applied by face-to-face survey to people over 18 years of age during the festival. August 15–20, 2018. Respondents were selected using systematic sampling techniques by geographic place of residence (Bethlehem, 2009). In total, 1,030 attendee surveys were administered (636 local residents and 394 tourists). The attendee surveys provide a 95% confidence level and a 3.0% margin of error for all attendees. To arrive at this sample, 1,376 survey attempts were made, 346 of which failed the filter question: Is attending the Petronio Álvarez Festival the main reason you are in Cali today? This question is fundamental to estimate the economic value, in the sense that it implies the reason without which the trip would not have been made, in the case of non-local attendees (from the rest of Colombia and abroad). In the case of local residents, it is understood as the reason that keeps them in the city during the specific season (see United Nations, 2000). Spending by attendees depends on various factors, including: place of residence; days of stay in the city; type of accommodation; means of transportation used to get around the city; purchase of souvenirs, gifts; among others. In this article, they are classified as accommodation; craft fair (e.g. handicrafts, musical instruments, cosmetics); traditional cuisine (e.g. food, drinks and refreshments); local transportation; others outside the festival citadel. Moreover, they are homologated with national accounting. To obtain an adequate estimate of the economic value generated by these two sources of demand (production/organization + attendees), some adjustments are required. First, the investment of the Mayor’s Office of Cali should be reduced by the leakage, which represents the payment to productive factors or purchases of inputs outside the city (Crompton, 2006). Second, the total number of unique attendees should include only those whose main reason for being in the city is to attend the festival. Therefore, it is necessary to subtract from the total number of unique attendees what in the literature of economic impact studies is known as “time–switchers” and “occasional” attendees (Crompton et al., 2001). In the same sense, we must include local attendees who might leave the city (expenditure leakage) during a 1 The questionnaire and the database from the surveys are available upon request. 834 L. F. Aguado et al. Anatomy of the economic value generated by a cultural event vacation period, but stay as a result of a rational choice to attend the festival; in the article we call them intralocal tourists. 3.2. Empirical model: Input–output model (I–O) To estimate the economic value of stages (ii) and (iv), an input–output model, hereafter I–O, is constructed (Miller & Blair, 2022)2. I–O models are extensively used to estimate the economic effects derived from the realization of cultural events (Pereira et al., 2023; Seaman, 2020; Miernyk, 2020; Mahajan, 2018; Llop & Arauzo-Carod, 2012). In essence, an (I–O) quantifies the effects of an increase in the production of a sector or industry (e.g., the realization of a cultural event) on the demand associated with its value chain (e.g., creatives, musicians, lighting equipment, local transportation, hotel accommodations, advertising, food). The effects are measured in new income, production and employment under the assumption that prices do not change. An (I–O) is a double-entry table describing the functioning of an economy (local, regional, national) through the structural interdependencies between different sectors and activities. The latter are represented by the flows (purchases/sales) of goods and services expressed in monetary values. In an (I–O) the flows of transactions 0, 1, , , 1, , , ij z i nj n≥=… =… among the n productive sectors of an economy, are summarized in the purchases/sales that a sector (i) makes to other sectors (j), including the same sector, to reach a given level of production ( i x ). The latter is captured by the technical coefficients ,/ ij ij j a zx= which indicate the quantity of inputs of sector i needed to produce one unit of final demand of sector j. Households, government and foreign trade, as economic agents, also make transactions with the productive sectors, only that the purchases made by these agents are destined for the final consumption of goods and not to be used as inputs for the production of other goods. This flow of transactions is called final demand (). i f Thus, the total production of each n sector is constituted by the sales it makes to the other sectors ( ) ij z and the final demand (). i f This is 1 . n i ij i j x zf = = + ∑ The fundamental equation of an (I–O) is given by: 1,X IA D −  = −  (1) where X is a vector ( 1)j× showing the gross value of production of the j sectors of the economy, I represents the identity matrix ( ),jj× A represents the matrix of technical coefficients (). ij a The latter represents the intersectorial purchase flows per unit of production that reflect the direct relations of the productive structure of an economy; D is the vector ( 1)j× of the demand for production by agents (household, government, foreign trade). 1 IA −  −  is the Leontieff inverse matrix and provides the multipliers that measure the effects derived from an exogenous change in the demand of some sector of the economy on the levels of production, employment and input demand of the other sectors of the economy. The output multipliers ( ) ij ∝ measure the gross value of the output of sector i needed to produce one unit of final demand of sector j. The sum of column j of the Leontieff inverse matrix (), j ∝ is interpreted as the amount of output of all sectors (the economy as a whole) needed to generate one unit of final demand of sector j. The sum of the i rows, ( i ∝ ), is 2 The structure and results of the input–output model are available upon request. Journal of Business Economics and Management, 2024, 25(4), 828–848 835 interpreted as the amount of output of sector i needed to generate a unit vector of final demand (of the economy as a whole). Type I multipliers include inter-sectoral linkages. That is, the direct effects of the change in final demand in sector j and the indirect effects on other sectors. The effects that arise when workers receive additional income and spend it, the induced effect, are included in Type II multipliers, these multipliers endogenize the new household expenditures and wages, also called total multipliers. Employment multipliers measure the employment required to generate one unit of output of (). i x This measure is called the technical coefficient of employment or direct coefficient of employment. The increase in total employment (E) is estimated in a similar way, as the product between the vector of direct employment by sectors of the economy of the impact area ()L and the matrix of multipliers: 1.E L I A D MD −  =×− = ×  (2) M is the matrix of total employment multipliers. The components of this matrix ( ) ij m show the total employment required in sector i for sector j to produce one unit of output for final demand. Thus, row i shows how employment is generated in sector i by the activity required in all other sectors, and its sum ( ) i m is the total increase in employment in sector i derived from unit increases in final demand in all sectors (economy as a whole). The columns show the ways in which the activity generated by sector j creates employment in all sectors of the economy. Thus, the column sum of the employment multipliers ( ) j m indicates the total employment generated in the economy in the face of unit increases in the final demand of sector j. Type II employment multipliers are used to estimate employment, i.e. the effect of household spending and wages is incorporated. In order to obtain an input–output matrix that reflects the productive structure of the economy of the city of Cali, the following process was carried out (Hewings, 2020; SACO, 2019; Mahajan, 2018). First, the 2010 Colombian symmetric matrix of 61 product groups was taken, initially adding 37 groups and then 13 groups. The employment vector was obtained from the employment matrices for Colombia and the departmental and municipal results of the Gran Encuesta Integrada de Hogares, and the vector was disaggregated into 37 and 13 groups. Second, using indirect methods, based on the economic accounts and production indicators prepared by the Planning Office of the Department of Valle del Cauca, a production vector was constructed to adapt the 13–group matrix of the national economy (Colombia) to the economic structure of Valle del Cauca3. For the adjustment of the matrix, we use the RAS synthetic proportional adjustment method, which is based on biproportional adjustment, to perform a double correction: both in row and column aggregates (Holý & Šafr, 2023; Hewings & Fernández, 2019; ten Raa, 2009; Fernandez et al., 2015). Third, we calibrate the matrix output and employment multipliers for Valle del Cauca according to the economic structure of the city of Cali. Figure 3 presents the four strategic activities proposed to accurately estimate the economic dimension of the value generated by a cultural event. The methodology and information sources used make it possible to provide accurate measures of the economic value generated by a cultural event and, in turn, provide a more complete picture of the economic value in terms of supply and demand. 3 Politically and administratively, Colombia is divided into departments, districts, municipalities and indigenous territories. The municipalities constitute the second level of the administrative structure; grouped together, they form the departments (DANE, 2013). The municipality of Cali is the capital of the department of Valle del Cauca and accounts for approximately 65% of the department’s GDP. 836 L. F. Aguado et al. Anatomy of the economic value generated by a cultural event Figure 3. Strategic activities to estimate the economic dimension of the value generated by a cultural event (source: authors’ own elaboration) Figure 4. Methodological contribution to improve the accuracy in estimating the economic value generated by a cultural event. (source: authors’ own elaboration) Journal of Business Economics and Management, 2024, 25(4), 828–848 843 generated in the commercial stalls is used as a control variable to verify consistency in the estimation of direct jobs derived from the input–output model. Finally, the available information made it possible to robustly measure two stages of the cultural cycle. The stages of creation and circulation present additional difficulties. In the case of creation, the difficulty is centered on estimating the costs of expressing artistic and cultural creation, which is not reflected in the budgets. In the case of circulation, the budgets reflect a small part that does not consider dissemination in networks and the media, which requires additional efforts to measure. 6. Implications and limitations for future research 6.1. Implications The economic value of a cultural event is expressed through a set of positive externalities internalized by the territory that hosts it and can be the driving force to strengthen its economy and promote its image. Therefore, the success of a good estimate is centered on properly estimating three flows: Economic budget [PH]: measure of the flow of expenditure in the impact area attributed exclusively to the organization/production of the event. PH = Event budget in homologated to national accounts – (local funding + expenditure leakage). Number of attendees “event motive” [AME]: measure of the flow of attendees visiting the impact area attributed exclusively to the event [unique and authentic cultural experiences]. AME = Total unique attendees – (local attendees + “escapees” – “local intra–tourists”) – (“time–switchers” + “casuals”). “Event motive” attendee expenditure [GA]: measure of the flow of expenditure in the impact area attributed exclusively to event attendees. To estimate it requires identifying at least two population samples: local intra–tourists and tourists (national, international). And, to avoid biases that may under/overestimate it: [i] ensure that each population sample is separated and distributed among the different activities that make up the event throughout its duration [ii] ensure that the capture of information is not concentrated in the same sample, this risk is linked to the nature of participation in this type of event: high social interaction and attendance in groups of people – families/friends. Systematic sampling4, by geographic place of residence, at the entrance/exit sites and around the venues of the different activities, during the event, is a good alternative that allows minimizing the identified biases. GA = expenditure homologated to national accounting sectors * average per capita “event motive” expenditure. 6.2. Limitations and future research The methodology and results focus on local live cultural events with wide international recognition. The idiosyncratic component is linked to the cultural heritage accumulated in the territory hosting the event. All these elements together imply an interrelation, in time and space, between artists, creatives, cultural managers and attendees, to create value through the event. Therefore, empirical and quantitative measures do not fully capture the complexity and multidimensionality of the value generated by cultural events. 4 Systematic sampling randomly selects the first respondent for the sample (e.g. at the entrance/exit or around each event a surveyor stands and selects an attendant), and then selects subsequent respondents using fixed time intervals. (e.g. every 3 or 5 minutes) until the desired sample size is reached (see, Bethlehem, 2009). 844 L. F. Aguado et al. Anatomy of the economic value generated by a cultural event In practice, the estimation of the number of people attending the event limits the availability of good approximations of the economic value generated by a cultural event. Generally, efforts are focused on measuring the flow of tourists and their spending. However, it is difficult to adequately measure the locals for whom the event retains them in the area of impact [local intra–tourists]. And, the locals who leave the impact area precisely because of the event [escapees] remains a methodological challenge. The dynamics of a living cultural event are maintained over time, although its greatest expression in economic terms is manifested in each period (year) during its realization. Efforts should be made to measure what happens, in economic terms, outside the moment when the event takes place: for example, training to maintain and improve the skills of artists and creatives. In addition, explore how through digital technologies and platforms can coexist: live cultural participation at the event venue and live cultural participation at a distance, to broaden cultural participation and improve the economic sustainability of these types of events. 7. Conclusions The results show that a cultural event does indeed contribute to the competitiveness of the territory. In fact, it generates new expenditure flows that materialize in new jobs and a brand for the territory that allows locals and tourists to generate unique and authentic experiences based on intangible heritage. In practice, four sources were identified that limit the measurement of the economic value of a cultural event: i. the organization’s budget, ii. the leakage of expenses, iii. the estimation of attendees and iv. the availability of input–output matrices that reflect the reality of the economic structure of cities and regions. The article’s contributions to the empirical literature on measuring the value of cultural events include the homologation of expenditures with national accounting sectors, the development of an economic budget and the identification of types of attendees. However, the availability of local input–output matrices remains a challenge to measure the economic value of cultural events. The economic value generated by a cultural event is not limited to the sector itself, but extends to non-cultural sectors, extending its effect to almost all sectors of economic activity. Therefore, from an economic point of view, the celebration of the festival affects an entire ecosystem that integrates the logistics and supply chain that sustains it. An adequate measurement of the economic dimension of the cultural value provides cultural policy makers with elements to position the sector as key to the development of the territory. In particular in two main aspects: Cultural events are a source of competitiveness for the territory. Today, competitiveness is understood as the ability to create an attractive environment; for a family to live and prosper; to work and attract creative talent; to invest and do business; to care for the environment; to respect diversity. Cultural events generate employment and are inclusive. The cultural sector acts as a turbine to generate income and jobs in the territory. The basic input to create these jobs are the customs and traditions of the community (accumulated intangible heritage) and the natural talent of the people. The repositories of these skills and talents associated with the intangible heritage are ethnic and socially and economically vulnerable groups. Journal of Business Economics and Management, 2024, 25(4), 828–848 845 Acknowledgements The authors thank the Inclusion for Peace Program (IPA) of the International Organization for Migration (mission in Colombia), and the Office of Research and Development of the Pontificia Universidad Javeriana Cali, Colombia. The second author (J.H.C.) gratefully acknowledges the financial support of the Ayudas para la Recualificación del Sistema Universitario Español in its Margarita Salas Grant Modality by Ministerio de la Universidad de España by Resolution of November 29, 2021 of the Universidad de Sevilla, funded by the European Union – NextGenerationEU. Author contributions Luis F. Aguado (LFA), Jesús Heredia-Carroza (JHC) and Aaron Espinosa-Espinosa (AEE): conceptualization, formal analysis, methodology, writing original draft. Paula Garizado (PG) and Henry Duque (HD): data curation, validation, reviewing the original draft. Disclosure statement The authors declare that they have no relevant financial or material interests related to the research described in this article. References Aguado, L., Arbona., A., Palma, L. & Heredia-Carroza, J. (2021). How to value a cultural festival? The case of Petronio Álvarez Pacific Music Festival in Colombia. 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