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CMA & LAC Value study of GLAMs in Canada

Value Study of GLAMs In Canada, Canadian Museums Association,

Report for the Ottawa Declaration Working Group


Foreword

Canadian galleries, libraries, archives and museums ( GLAMs) form an integral part of the fabric of our nation, enriching the lives of millions of visitors of all ages, backgrounds and regions every year.

Rich repositories of art, information, history and treasure, these precious institutions serve to preserve and promote Canadian heritage at home and abroad, while providing access to resources for education, research, learning and artistic creation.

Collectively known as the GLAM sector, ours is an industry that regularly punches above its weight. Non-profit GLAMs, whether in large cities or small towns across the country, attract world-class exhibits and provide communities with essential educational and research opportunities they may not otherwise be able to access.

For too long, members of the GLAM sector have largely operated in silos. Enter the Ottawa Declaration Working Group, comprised of sector representatives and co-led by Library and Archives Canada ( LAC) and the Canadian Museums Association ( CMA). We now recognize the importance of working together to increase the understanding of the value of our sector. We believe this first-of-its-kind study goes a long way towards that goal.

An initiative of the Ottawa Declaration Working Group comprised of sector representatives and co-led by the Canadian Museums Association ( CMA) and Library and Archives Canada ( LAC), the study found that for every dollar invested in non-profit GLAMs, society gets nearly four dollars in benefits. This return is on par with government investments in transportation infrastructure projects.

The study was conducted by Oxford Economics using metrics commonly employed by cultural institutions, as well as the results of a national survey of Canadians. It found users of GLAMs would be willing to pay $4 billion more per year to access them if required – a testament to the intrinsic value of GLAMs to Canadians.

This is a value so great, that even non-users recognize the importance of GLAMS to society at large and to future generations. Non-users said they’d be prepared to contribute $22 per year for museums, $17 for galleries and libraries and $14 for archives as a donation towards the maintenance of these institutions. This amounts to an additional $2.2 billion per year.

In all, 96% of respondents surveyed for the study said that museums contribute to our quality of life. Indeed, the study found that visiting GLAMs can be linked with improved health and wellbeing – equivalent to receiving a monetary bonus of $1,440 a year.

GLAM visits are associated with many other important societal benefits including greater literacy, curiosity, innovation, knowledge and creativity, increased rates of volunteerism and a better sense of community. These are incredibly important qualities in an increasingly divisive world.

Another way for users to interact directly with GLAMs is through their official websites, online catalogues and social media pages. The study pegged the value of these online visits at $1.6 billion per year.

It also noted GLAMs generate significant educational benefits for Canada, including through school visits which provide children across the country with important learning opportunities. The value of these visits is estimated at $3.1 billion. It was further found that academic libraries contribute an additional $3.4 billion and are associated with higher student wages and income over the working lifetime of students.

In all, it is estimated that society gains nearly $8.6 billion from GLAMs’ existence every year. That is no small contribution to Canada’s economic and social prosperity. Accordingly, the preservation, promotion and development of GLAMs should be of concern not just to those of us who work in the sector, but to all Canadians.

Download full report here


Executive summary

In 2016, the Canadian Museums Association ( CMA), in partnership with Library and Archives Canada, held a summit on the value of galleries, libraries, archives and museums ( GLAMs). Oxford Economics participated in the discussion, recommending that “the broad [ GLAM] community should consider actively working together to collect data and to carry out horizontal value studies.” In late 2018, the CMA, on behalf of the Ottawa Declaration Working Group, commissioned Oxford Economics to undertake a national study looking at the value of GLAMs in Canada.

150 million estimated visits to Canadian galleries, libraries, archives and museums in one year. Of these, over 100 million were to public libraries and over 30 million to museums.

Canadian GLAMs receive in the region of 150 million visits every year, but they are much more than simply visitor attractions. They preserve and promote Canadian heritage domestically and around the globe, while providing access to resources for education, research, learning and artistic creation. This report aims to capture the fundamental role played by non-profit GLAMs in Canada, using a combination of quantitative value metrics and qualitative assessments of societal values.

How we assess the value of galleries, libraries, archives and museums

This study provides an assessment of the value of GLAMs using cost-benefit analysis ( CBA) within an economic welfare framework.1 It takes a Total Economic Value ( TEV) approach, which measures the economic benefits accruing not just to direct beneficiaries such as GLAMs visitors, but to “non-users”—people who value GLAMs’ existence even if they have not recently visited one.

While assessing the costs of maintaining and operating GLAMs is relatively simple, quantifying the benefits is more difficult, requiring a range of economic techniques in line with the diversity of activities GLAMs undertake. These include a calculation of their value as visitor attractions—computed from what visitors actually pay to access GLAMs, but also an estimation of what visitors would have been prepared to pay over and above the ticket price (known as the “consumer surplus.”)

$4.0bn total annual “consumer surplus” of visitors to GLAMs in Canada. This is the sum of the additional amounts these visitors would be willing to pay to visit GLAMs .

To capture the non-use and broader social value of GLAMs, we undertook a national survey of 2,045 Canadian residents (hereafter referred to as the “national survey.”) Willingness to pay questions were incorporated in this survey, and quotas were imposed by sex, age, education, language (English/French), and province and territory of residence to ensure a representative sample of the Canadian population.

Value of GLAMs to their visitors

Based on the most current data, an estimated 150 million visits are made to GLAMs by members of the public each year. Some visits required an entry fee, and hence produced operational revenues for the institution. For many others, such as libraries, entry was free of charge.

Researchers use a variety of approaches to estimate the value visitors place on GLAMs. The approach adopted for physical visits in this study is the Travel Cost Method ( TCM), which estimates consumer surplus based on how demand would change if the costs of admission were to rise from current levels. This approach suggests a total physical use consumer surplus for GLAMs of $4.0 billion over a one-year timeframe.2

$1.6bn total one-year value of GLAMs’ online services. The introduction of online services has seen much greater access to GLAMs information in recent years.

Non-use value of GLAMs

Beyond visitor benefits, another category of valuation represents the underlying values that Canadians hold for GLAMs whether or not they visit them. This represents the fact that, regardless of whether they visit them, Canadians value these institutions and want them to be supported. This so-called non-use value incorporates a number of components, including:

  • the value that people attach to the existence of GLAMs whether or not they will ever visit them (existence value);
  • the value placed on preserving GLAMs for the benefit of future generations (bequest value); and
  • the value of having the option to visit GLAMs at some point in the future (option value).

To quantify these intrinsic values, our national survey explored the maximum amount people would pay each year as a donation to maintain all of Canada’s non profit GLAMs. Respondents who did not visit GLAMs over the past 12 months stated they would be willing to contribute $22 per year for museums, $17 for galleries and libraries, and $14 for archives. Taking these values as an underlying non-use value of GLAMs for all Canadians 16 and above, we estimate a total non-use value of $2.2 billion for the entire GLAM sector in Canada.

$3.1bn total educational benefits to school students. This is the value of GLAMs’ educational contribution to the students and society as a whole.

Educational value of GLAMs to students

GLAMs also generate significant educational benefits for Canada, including the learning that school visits provide to children across the country. While estimating returns to education is not straightforward, economists have long recognized and measured such returns as the value that education contributes to future wages.

We adopted this method to calculate a total value for GLAMs’ educational benefits (as a result of school visits) of $3.1 billion.

The value of GLAMs’ online content

Online visits are another way for users to interact directly with GLAMs, and so constitute another form of consumer surplus that needs to be taken into account in their total valuation. We estimate GLAMs’ online value (i.e. consumer surplus) is equivalent to $1.6 billion per annum. These results include visits to GLAMs’ official websites, catalogues and Facebook, Twitter and Instagram usage, but exclude other social media portals.

$1,440 annual value to the average GLAMs user in improved wellbeing. As measured through the health effects of GLAMs .

Wider benefits

Above and beyond the values described so far, GLAMs support wider benefits (“externalities”) which may not be captured by a user’s consumer surplus or other direct valuation approaches. Some of these wider benefits are difficult to incorporate into a cost-benefit analysis but are nevertheless important to recognize.

One wider benefit that we are able to quantify is the wellbeing effect of GLAMs. Regression modeling of our national survey data made it possible to provide monetary estimates of the equivalent wellbeing benefit conferred by GLAMs usage. These suggest the annual value to an average GLAM user is equivalent to $1,440 in improved wellbeing (as measured through health effects). In other words, visiting GLAMs has the same wellbeing effect of receiving a monetary bonus of $1,440 per annum.

Multi-criteria analysis

GLAMs provide intrinsic social values that economic frameworks cannot address. Accordingly, Multi-Criteria Analysis ( MCA) was also used to assess the perceived importance and degree of effectiveness of these attributes. Our MCA shows the general public and GLAM stakeholders tending to agree on which objectives matter most for GLAMswhile archives, galleries and museums play a key role in preserving Canadian heritage, libraries are crucial for access to research resources.

BCR 3.9 for every dollar invested in GLAMs, society gets back nearly four. Benefit cost ratio ( BCR) of GLAMs .

Cost-benefit analysis of GLAM

Combining all value components we were able to quantify as benefits, the total gross value of GLAMs to Canada is $11.7 billion a year (in 2019 prices). This estimated benefit was derived from annual costs (the operational expenditure needed to run GLAMs) of $3.0 billion. Dividing the $11.7 billion in benefits by the $3.0 billion of costs gives a benefit-cost ratio ( BCR) of 3.9. This means that for every dollar invested in non-profit GLAMs, society gets nearly four dollars in return. GLAMs perform very favourably when compared to other major social investments, such as transportation infrastructure.

It is also useful to highlight the net benefits of GLAMs; some prefer this approach as it indicates how much better off society is in aggregate. We estimate that society gains $8.6 billion from GLAMs’ existence every year.

Fig. 1. Summary of costs and benefits of GLAMs, 2019 prices
$million 2019 Galleries Libraries Archives Museums All GLAMs
Revenue 222 31 22 451 727
Non-use value 536 537 446 693 2,212
Use value 615 1,797 185 1,374 3,972
Online usage 378 636 353 277 1,644
Educational value 435 1,361 41 1,271 3,108
Total benefits 2,185 4,362 1,047 4,067 11,662
Operating costs 556 955 395 1,106 3,012
Total costs 556 955 395 1,106 3,012
Benefit-Cost Ratio ( BCR) 3.9 4.6 2.7 3.7 3.9
Net benefits 1,629 3,408 652 2,961 8,650

 

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