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THE ECONOMIC IMPACTS OF THE 2011 SUNDANCE FILM FESTIVAL HELD IN UTAH FROM JANUARY 20, 2011 TO JANUARY 30, 2011

PREPARED BY JAN ELISE CRISPIN BUREAU OF ECONOMIC AND BUSINESS RESEARCH UNIVERSITY OF UTAH

April 2011

The Economic Impact of the 2011 Sundance Film Festival

ECONOMIC IMPACTS OF THE 2011 SUNDANCE FILM FESTIVAL The Bureau of Economic and Business Research (BEBR) at the University of Utah has estimated the economic impacts of the 2011 Sundance Film Festival (the Festival) held in the state of Utah from January 20, 2011 through January 30, 2011. The impact estimates were based on (1) intercept surveys of Festival attendees conducted by BEBR survey staff each day during the Festival and (2) expenditures made by the Sundance Institute to produce the Festival. The survey findings summarized in this report are based on 473 intercept surveys conducted at each of the four locations where Festival films are shown. These include Park City, Salt Lake City, Sundance Resort and Ogden. The results of those surveys are summarized in the body of this report. Supporting information and statistical tables are provided in Appendices A through F. The expenditures made by the Sundance Institute to produce the Festival are detailed in Appendix G. The economic impacts of the 2011 Sundance Film Festival have been estimated using a regional impact model known as RIMS II, developed by the U.S. Department of Commerce, Bureau of Economic Analysis. A discussion of RIMS II is also provided in Appendix G.

MAJOR FINDINGS •

An estimated 45,797 people attended the Sundance Film Festival in 2011, an 11 percent increase over the 2010 attendance estimate of 41,221. Approximately 95 percent of Festival guests intended to view at least one film screening. The remaining 5 percent were in Utah for the Festival but did not plan to attend a screening.

•

Approximately one-third of festival attendees were Utah residents (15,201). Of these, slightly more than half (51 percent) live in Salt Lake County. Approximately 22 percent are residents of Summit County and 11.5 percent live in Weber County.

•

An estimated 30,596 visitors from outside the state attended the 2011 Sundance Film Festival. Of the estimated 30,596 visitors, 33 percent indicated this was their first visit to Utah and 79 percent indicated they traveled to Utah specifically to attend the Festival.

•

Nonresident attendees accounted for approximately 67 percent of all Festival attendees in 2011, up from 61 percent in 2010 and 66 percent in 2009.

•

The largest share of nonresident visitors were U.S. residents (87 percent or 26,529 visitors). An estimated 45 percent of U.S. visitors were residents of three states—California, New York, and Colorado.

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BUREAU OF ECONOMIC AND BUSINESS RESEARCH


•

International visitors accounted for approximately 9 percent of all Festival attendees, or an estimated 4,067 people. Over the last three years, the share of international visitors as a percentage of total attendees has increased, growing from 6.8 percent of all visitors in 2009 to 8.8 percent in 2011. While a large share of the 4,067 international visitors came from England (581), people from 23 countries traveled to Utah to attend the Festival in 2011.

•

Slightly more than half of all nonresident Festival attendees indicated they would visit Utah again during the next twelve months.

•

While the Sundance Film Festival appeals to people of all ages, almost half of all attendees are between the ages of 19 and 35. About 33 percent are between the ages of 36 and 55, and 18 percent are over 55.

•

About 56 percent of Festival attendees in 2011 were female. This is an increase over the 2010 estimate of about 51 percent and the 2009 estimate of 54 percent.

•

Festival attendees are well educated, almost 82 percent are college graduates. One-quarter have a master’s degree and about 7 percent have earned a doctorate degree.

•

About 43 percent of those who attended the Festival in 2011 had an annual household income of $100,000 or more, a share that is significantly higher than the 2010 estimate of 32.5 percent. Nonresident attendees were most likely to have high annual incomes—47.9 percent compared with 32.1 percent of Utah residents.

•

An increasing share of Festival attendees are in the entertainment industry. Of those attending the 2011 Film Festival, 22.2 percent identified themselves as “entertainment professionals,” up from 15.4 percent reported in 2010 and 19.3 percent reported in 2009. However, most Festival attendees identified themselves as “non-entertainment professionals” (47 percent); students accounted for 11.4 percent of attendees and press for about 1 percent.

FILM FESTIVAL ACTIVITIES •

Festival attendees expected to spend an average of 4.68 days at the Festival and attend about 6 screenings. A small share of attendees (13 percent) indicated they would participate in Festival activities for 9 or more days and expected to view, on average, about 9 movies. The majority of these individuals were residents of Utah and California.

•

Film screenings are offered at theaters in four locations, including Park City, Salt Lake City, Sundance Resort and Ogden. About 80 percent of Festival attendees who planned to see movies indicated they would watch most of their films in Park City. This percentage was highest for nonresident attendees—90.6 percent compared with 59.5 percent for Utah residents.

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•

More than half of those attending the 2011 Sundance Film Festival have attended in the past (56.4 percent). The average number of previous visits was about 5. Utah residents attend the Festival more often than do nonresidents. Almost 70 percent of Utah residents indicated they had attended previously, with an average of about 7 times. Fifty percent of nonresidents indicated they had attended in the past, with an average of about 4 times.

•

A majority of those attending the 2011 Festival said they would attend a future Festival (84.6 percent). This included 96.8 percent of Utah residents and 78.5 percent of nonresidents.

RECREATIONAL ACTIVITIES •

Forty percent of nonresident attendees (12,208) said they intended to ski or snowboard in Utah during their stay. Almost half of those who intended to ski or snowboard said they would recreate at the Park City Mountain Resort for an average of 1.6 days. Thirty-one percent said they would ski at Deer Valley for an average of 2 days, and 29 percent said they intended to ski at other Utah resorts for an average of 2 days as well.

LODGING AND TRANSPORTATION •

Nonresidents stayed an average of 5.9 nights during their visit. Almost 37 percent stayed commercially (in a hotel, motel or inn). Slightly more than one-third stayed in a condominium or timeshare, and 18 percent stayed with friends or family.

•

The Deer Valley/Park City area was the preferred location for nonresident attendees. An estimated 73 percent of nonresidents who attended the Festival stayed in this area, including those staying commercially as well as those staying with friends or family. Approximately 17 percent of nonresident attendees stayed in the Salt Lake area, 3.5 percent stayed at the Sundance Resort, and 6 percent stayed in other areas of the state.

•

Seventy-two percent of nonresident attendees traveled to Utah via air services (20,029 people). About 14 percent traveled to Utah in private vehicles and 11 percent traveled in a rented vehicle.

ATTENDEE SPENDING •

During the Festival, attendees spent a total of $58.6 million. Of this amount, nonresidents spent $54.4 million and Utah residents spent about $4.2 million (Table 1).

•

Average daily spending by Festival attendees was $234.18. Nonresidents averaged $321.15 each day during their stay and Utah residents spent an average of $59.14 each day they attended the Festival.

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•

Total spending per person averaged $1,279.39. Nonresidents spent a total of $1,778.77 per person during their stay and Utah residents spent an average of $274.25. Total spending is the sum of the average daily amounts that each attendee spent during his/her stay in Utah. Table 1 2011 Sundance Film Festival Total Festival-Related Spending Spending Category Lodging Meals

Utah Residents

Non Residents

Total

$170,707

$25,654,746

$25,825,453

$2,386,405

$14,091,600

$16,478,005

Car Rental

$456

$2,513,461

$2,513,917

Other Transportation

$161,283

$1,140,313

$1,301,596

Recreation

$475,943

$5,290,660

$5,766,604

Other Retail Purchases Total

$974,080

$5,732,467

$6,706,547

$4,168,874

$54,423,247

$58,592,121

Note: Total spending is based on the average total spending per person during his/her stay. Source: Calculated by BEBR based on intercept surveys conducted during the Festival.

•

Total spending for lodging averaged $563.91 and accounted for 44 percent of all expenditures made by Festival attendees (Table 2). Total spending for food and beverages averaged $359.81, followed by miscellaneous retail purchases ($146.44) and recreation and entertainment ($125.92). Table 2 2011 Sundance Film Festival Weighted Average Spending Per Person Spending Category

Amount Spent

Lodging

$563.91

Meals

$359.81

Car Rental

$54.89


$28.42

Recreation

$125.92

Other Retail Purchases Total

$146.44 $1,279.39

Source: Calculated by BEBR based on intercept surveys conducted during the Festival.

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•

Total attendance at the Festival increased 11 percent and total spending increased 18 percent over 2010 levels. The largest dollar increases were for meals (food and beverages) and miscellaneous retail purchases. In comparison, spending for recreation and entertainment declined (Table 3). Table 3 2011 Sundance Film Festival Total Festival-Related Attendee Spending 2010 and 2011 Comparison

2010

2011

Dollar Change

Lodging

$24,953,683

$25,825,453

$871,770

Meals

$10,573,149

$16,478,005

$5,904,856

$1,776,435

$2,513,917

$737,482

$597,515

$1,301,596

$704,081

Recreation

$6,911,768

$5,766,604

($1,145,164)

Other Purchases

$4,895,357

$6,706,547

$1,811,190

$49,707,907

$57,592,121

$7,884,214

Spending Category

Car Rental Other Transportation

Total

Data for 2009 were obtained from a previous report compiled by BEBR for the Sundance Institute.

ECONOMIC IMPACT ESTIMATES The economic impact estimates presented here include (1) the impacts of purchases made by nonresidents who attended the 2011 Sundance Film Festival and (2) the impact of expenditures made in Utah by the Sundance Institute to produce the Festival. The impact estimates were generated using an economic impact model known as RIMS II, developed by the Bureau of Economic Analysis. The model has been regionalized for Utah. Impacts of Nonresident Spending •

Spending by nonresidents attending the 2011 Sundance Film Festival totaled $54.4 million. These expenditures translate to an increase in gross state product (GSP) of $64.5 million, they generated $32.4 million in earnings for Utah residents and supported 1,338 jobs in Utah from January 20, 2011 through January 30, 2011. 1

•

Expenditures made by nonresident attendees generated nearly $5.5 million in state and local taxes.

•

Airline tickets purchased by nonresident attendees generate passenger facility charges (PFCs) that are paid to the Salt Lake City International Airport. The estimated amount of these charges generated by airline ticket purchases is $82,202.

1

Earnings is the sum of wage and salary disbursements, supplements to wages and salaries, and proprietors’ income. Jobs include both full-time and part-time employment.

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A comparison of the Festival’s economic impacts for 2010 and 2011 is presented in Table 4. Table 4 2011 Sundance Film Festival Economic Impact of Nonresident Spending 2010 and 2011 Comparison Impact Type

2010

2011

Change

Gross State Product

$52,820,614

$62,927,077

$10,106,463

Earnings

$27,543,589

$31,567,281

$4,023,692

1,163

1,307

144

$4,950,794

$5,512,062

$561,268

Na

$82,202

Na

Jobs State and Local Taxes Passenger Facility Charges Na: Not available.

The economic impacts for 2010 were obtained from a previous report compiled by BEBR. The fiscal impacts for 2010 have been recalculated using a tax model developed by BEBR for nonresident visitor spending. Impacts of Sundance Institute Spending in Utah •

To produce the 2011 Film Festival, the Sundance Institute spent a total of $7.5 million of which $4.3 million was spent in the state of Utah. The economic impacts of these expenditures include approximately $7.9 million in GSP, $3.4 million in earnings and 298 jobs. These impacts occurred over a five-month period beginning September 1, 2010 and ending February 28, 2011.

•

The fiscal impacts associated with Sundance Institute’s spending included $296,331 in state tax revenue and $67,867 in tax revenue for local units of government.

•

Airline tickets purchased by the Sundance Institute for film judges and other invited guests are subject to passenger facility charges. During the five-month period from September through February, the Institute purchased a total of 631 airline tickets. The estimated PFC associated with those purchases was $2,353.

•

When the economic impacts of the Sundance Institute are combined with the impacts of nonresident spending during the Festival, the 2011 Sundance Film Festival supported 1,605 jobs in Utah, generated nearly $35 million in earnings for Utah residents, and contributed $70.9 million in GSP for the state (Table 5).

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The Economic Impact of the 2011 Sundance Film Festival Table 5 2011 Sundance Film Festival Economic Impact of Sundance Institute Spending 2010 and 2011 Comparison Impact Type

2010

2011

Change

Gross State Product

$9,961,574

$7,939,743

($2,021,831)

Earnings

$6,124,634

$3,425,798

($2,698,836)

350

298

(52)

State Tax Revenue

$518,144

$296,331

(221,813)

Local Tax Revenue

$87,582

$67,861

(19,721)

Na

$2,353

na

Jobs

Passenger Facility Charges

The economic impacts for 2010 were obtained from a previous report compiled by BEBR. Table 6 2011 Sundance Film Festival Economic Impact Summary Sundance Institute Spending and Nonresident Spending Sundance Institute Spending Impacts

Nonresident Festival Spending Impacts

Total Impact

Gross State Product

$7,939,743

$62,927,077

$70,866,820

Earnings

$3,425,798

$31,567,281

$34,993,079

298

1,307

1,605

State Tax Revenue

$296,331

$3,781,546

$4,077,877

Local Tax Revenue

$67,861

$1,730,516

$1,798,347

$2,353

$82,202

$84,555

Impact Type

Jobs


Note: Passenger facility charges were estimated using information provided by the Salt Lake City International Airport.

Table 7 2011 Sundance Film Festival Total Economic Impact Summary Sundance Institute Spending and Nonresident Spending 2010 and 2011 Comparison Impact Type

2010

2011

Change

Gross State Product

$62,782,188

$70,866,820

$8,084,632

Earnings

$33,668,223

$34,993,079

$1,324,856

Jobs

1,513

1,605

92

State Tax Revenue

$3,903,628

$4,077,878

$174,250

Local Tax Revenue

$1,652,892

$1,798,247

$145,355

Na

$84,555

Na


The economic impacts for 2010 were obtained from a previous report compiled by BEBR. The fiscal impacts for 2010 have been recalculated using a tax model developed by BEBR for nonresident visitor spending. 7



APPENDIX SURVEY OF PERSONS ATTENDING THE 2011 SUNDANCE FILM FESTIVAL Table of Contents A. Attendance Information A-1. Estimated Attendance and Sample Size . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 A-2. Primary Location Where Festival Attendees Will View Screenings . . . . . . . . . . . . . . 10 A-3. Primary Location Where Attendees Will View Screenings, 2010 and 2011 Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 B. Spending and Economic Impact of Spending B-1. Estimated Weighted Daily Average Spending, All Sundance Film Festival Attendees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-2. Estimated Daily Average Spending per Person, Utah Resident and Nonresident Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-3. Estimated Weighted Total Average Spending per Person . . . . . . . . . . . . . . . . . . . . . . B-4. Estimated Total Average Spending per Person, Utah Resident and Nonresident Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-5. Estimated Total Average Spending per Person, 2010 and 2011 Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-6. Estimated Total Average Spending per Person, Utah Resident and Nonresident Comparison: 2010 and 2011 . . . . . . . . . . . . . . . . . B-7. Estimated Total Spending, Utah Resident and Nonresident Comparison . . . . . . . . . B-8. Estimated Economic Impacts of Nonresident Spending, 2010 and 2011 Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11 11 12 12 13 13 14 14

C. Demographic and Economic Characteristics of Sundance Film Festival Attendees C-1. Residency of Sundance Film Festival Attendees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-2. County of Residence, Utah Residents Only . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-3. U.S. Residency of Sundance Film Festival Attendees . . . . . . . . . . . . . . . . . . . . . . . . . C-4. Place of Residency of Sundance Film Festival Attendees . . . . . . . . . . . . . . . . . . . . . . C-5. Age of Sundance Film Festival Attendees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-6. Gender of Sundance Film Festival Attendees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-7. Educational Attainment Level of Sundance Film Festival Attendees . . . . . . . . . . . . . C-8. Occupation of Sundance Film Festival Attendees . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-9. Household Income of Sundance Film Festival Attendees . . . . . . . . . . . . . . . . . . . . . .

15 15 15 16 17 17 17 18 18

D. Festival Statistics D-1. Number of Days Attending the Sundance Film Festival . . . . . . . . . . . . . . . . . . . . . . D-2. Summary Statistics, Number of Days Attending the Sundance Film Festival . . . . . . D-3. Number of Intended Screenings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . D-4. Summary Statistics, Number of Intended Screenings . . . . . . . . . . . . . . . . . . . . . . . . . D-5. Location Where Most Screenings Will Be Viewed . . . . . . . . . . . . . . . . . . . . . . . . . . .

19 19 20 20 21

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D-6. D-7. D-8. D-9. D-10. D-11. D-12.

All Locations Where Attendees Will View Screenings . . . . . . . . . . . . . . . . . . . . . . . Nonresidents Visiting Utah Primarily to Attend the Sundance Film Festival . . . . . First Time Visiting Utah . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Prior Attendance at the Film Festival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Number of Times Previously Attended . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Summary Statistics, Number of Previous Visits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Percent of Attendees Who Plan to Attend a Sundance Film Festival in the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

21 21 22 22 23 24 24

E. Recreational Activities of Sundance Film Festival Attendees E-1. Nonresident Attendees Who Intend to Visit Utah Within the Next 12 Months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-2. Number of Accompanying Visitors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-3. Nonresident Attendees Who Plan to Ski or Snowboard While Attending the Sundance Film Festival . . . . . . . . . . . . . . . . . . . . . . . . . . . . E-4. Resorts Where Nonresident Attendees Intend to Ski or Snowboard . . . . . . . . . . . . E-5 Number of Days Skiing or Snowboarding, by Resort . . . . . . . . . . . . . . . . . . . . . . . .

25 26 26

F. Lodging and Transportation Statistics F-1. Type of Lodging Used by Nonresident Attendees . . . . . . . . . . . . . . . . . . . . . . . . . . F-2. Location of Lodging Used by Nonresident Attendees . . . . . . . . . . . . . . . . . . . . . . . F-3. Number of Nights of Lodging (Nonresidents) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4. Summary Statistics, Number of Nights of Lodging . . . . . . . . . . . . . . . . . . . . . . . . . . F-5. Primary Form of Transportation to Utah to Attend the Festival (Nonresidents) . .

27 27 28 28 28

G. Economic Impacts of Sundance Institute-Related Spending G-1. 2011 Sundance Film Festival, Economic Impacts of Sundance Institute Spending . . . . . . . . . . . . . . . . . . . . . . . . . G-2. 2011 Sundance Film Festival, Detailed Economic Impacts of Sundance Institute Spending . . . . . . . . . . . . . . . . . Economic Impacts: Measures and Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Input-Output Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rims II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Estimating Fiscal Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Definitions Used in This Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

25 25

29 29 30 30 30 31 31

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A. ATTENDANCE INFORMATION A-1.

Estimated Attendance and Sample Size Total Estimated Attendance

45,797

Surveys

473

The sample size of 473 from an estimated population of 45,797 attendees is sufficient to generate a maximum margin of error of 4.48 percentage points at the 95 percent confidence level. A-2.

Primary Location Where Festival Attendees Will View Screenings Place

Percent

Park City

75.7%

Salt Lake City

11.4%

Ogden

5.1%

Sundance Resort

2.1%

Not attending screenings

5.7%

Total

100.0%

Note: “Primary location” is where the respondent indicated he/she would attend most screenings.

A-3.

Primary Location Where Festival Attendees Will View Screenings 2010 and 2011 Comparison Place Park City

Percent

2011

Percent

28,731

69.7%

34,668

75.7%

Salt Lake City

8,533

20.7%

5,221

11.4%

Ogden

1,814

4.4%

2,336

5.1%

Sundance Resort

1,731

4.2%

962

2.1%

412

1.0%

2,610

5.7%

41,221

100.0%

45,797

100.0%

Uncertain/Not attending Total

10

2010



B. SPENDING AND ECONOMIC IMPACT OF SPENDING B-1.

Estimated Weighted Daily Average Spending, All Attendees Weighted Daily Average

Spending Category Lodging

Standard Error of the Mean

$101.13

$7.66

$68.05

$4.47

Automobile Rental

$9.94

$1.13


$5.42

$1.03

Recreation

$24.97

$1.73

Other Purchases

$24.67

$3.22

$234.18

$18.33

Meals

Total

A 95% confidence interval for the weighted daily average spending per person is $234.18 +/-$18.33 (adjusted for finite populations), producing a range of $215.85 to $252.51. B-2.

Estimated Daily Average Spending per Person Utah Resident and Nonresident Comparison Utah Residents

Nonresidents

Daily Average


Daily Average


$2.40

$1.40

$150.18

$10.77

$36.59

$2.87

$83.68

$5.26

Automobile Rental

$0.01

$0.01

$14.88

$1.69


$2.66

$0.54

$6.79

$1.28

$11.18

$1.37

$31.82

$1.91

$6.30

$1.26

$33.80

$4.20

$59.14

$7.23

$321.15

$25.25

Spending Category Lodging Meals

Recreation Other Purchases Total

A 95% confidence interval for daily average spending by Utah residents is $59.14 +/-$7.23 (adjusted for finite populations), producing a range of $51.91 to $66.37. A 95% confidence interval for daily average spending by nonresidents is $321.15 +/-$25.25 (adjusted for finite populations), producing a range of $295.90 to $346.40.

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The Economic Impact of the 2011 Sundance Film Festival B-3.

Estimated Weighted Total Average Spending per Person Weighted Total Average

Spending Category


Lodging

$563.91

$44.36

Meals

$359.81

$25.41

$54.89

$6.61

Automobile Rental Other Transportation

$28.42

$5.26

Recreation

$125.92

$8.69

Other Purchases

$146.44

$21.31

$1,279.39

$112.90

Total

A 95% confidence interval for weighted total average spending per person is $1,279.39 +/- $112.90 (adjusted for finite populations), producing a range of $1,166.49 to $1,392.29.

B-4.

Estimated Total Average Spending Per Person Utah Resident and Nonresident Comparison Utah Residents

Spending Category Lodging Meals Automobile Rental

Total Average

Nonresidents


Total Average


$11.23

$6.69

$838.50

$63.08

$156.99

$15.50

$460.57

$30.34

$0.03

$0.02

$82.15

$9.89


$10.61

$2.15

$37.27

$6.80

Recreation

$31.31

$3.78

$172.92

$11.13

Other Purchases

$64.08

$14.48

$187.36

$24.43

$274.25

$43.90

$1,778.77

$147.48

Total

A 95% confidence interval for total average spending by Utah residents is $274.25 +/-$43.90 (adjusted for finite populations), producing a range of $230.35 to $318.15. A 95% confidence interval for total average spending by nonresidents is $1,778.77 +/-$147.48 (adjusted for finite populations), producing a range of $1,631.29 to $1,926.25.

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B-5.

Estimated Total Average Spending per Person 2010 and 2011 Comparison

Spending Category

2010 Total Average

2011 Total Average

Dollar Change

Lodging

$605.36

$563.91

($41.45)

Meals

$256.50

$359.81

$103.31

Automobile Rental

$43.10

$54.89

$11.79


$14.50

$28.42

$13.92

Recreation

$167.68

$125.92

($41.76)

Other Purchases

$118.76

$146.44

$27.68

$1,205.89

$1,279.39

$73.50

Total

Note: Data for 2010 were obtained from a previous report compiled by BEBR.

B-6.

Comparison of Estimated Total Average Spending per Person Utah Resident and Nonresident Comparison: 2010 and 2011 Utah Residents

Spending Category Lodging Meals

Nonresidents

2010

2011

2010

2011

$13.73

$11.23

$988.42

$838.50

$175.72

$156.99

$308.80

$460.57

Automobile Rental

$0.00

$0.03

$70.99

$82.15


$4.31

$10.61

$21.09

$37.27

$128.47

$31.31

$193.06

$172.92

Recreation Other Purchases Total

$54.66

$64.08

$160.26

$187.36

$376.90

$274.25

$1,742.62

$1,778.77


13


The Economic Impact of the 2011 Sundance Film Festival B-7.

Estimated Total Spending Utah Resident and Nonresident Comparison

Spending Category

Utah Residents

Non Residents

Grand Total

Lodging

$170,707

$25,654,746

$25,825,453

$2,386,405

$14,091,600

$16,478,005

$456

$2,513,461

$2,513,917


$161,283

$1,140,313

$1,301,596

Sporting/Recreation

$475,943

$5,290,660

$5,766,604

Other Retail Purchases

$974,080

$5,732,467

$6,706,547

$4,168,874

$54,423,247

$58,592,121

Meals Automobile Rental

Total

B-8.

Estimated Economic Impacts of Nonresident Spending 2010 and 2011 Comparison

Impact Variable

2010

2011

Change

Gross State Product

$52,820,614

$64,515,559

$10,106,463

Earnings

$27,543,589

$32,384,319

$4,023,692

1,163

1,338

144

State Tax Revenue

$3,903,628

$4,077,877

$174,249

Local Tax Revenue

$1,652,892

$1,798,347

$145,455

Jobs


14



C. DEMOGRAPHIC AND ECONOMIC CHARACTERISTICS OF SUNDANCE FILM FESTIVAL ATTENDEES C-1.

Residency of Sundance Film Festival Attendees Resident of Utah

C-2.

Frequency

Percent

Number

Yes

157

33.2%

15,201

No

316

66.8%

30,596

Total

473

100.0%

45,797

County of Residence Utah Residents Only Response Frequency

Percent

Salt Lake

80

51.0%

Summit

35

22.4%

Weber

18

11.5%

Utah

7

4.4%

Wasatch

6

3.8%

All Other

11

7.0%

157

100.0%

County

Total

C-3.

U.S. Residency of Sundance Film Festival Attendees

U.S. Resident Yes No Total

15

Response Frequency

Percent

Number

431

91.1%

41,730

42

8.9%

4,067

473

100.0%

45,797


The Economic Impact of the 2011 Sundance Film Festival C-4.

Place of Residency of Sundance Film Festival Attendees

State or Country Utah California

Response Frequency

Valid Percent

157

33.2

77

16.3

Response Frequency

Valid Percent

Nebraska

2

.4

North Carolina

2

.4

State or Country

New York

25

5.3

Tennessee

2

.4

Colorado

14

3.0

Germany

2

.4

Texas

13

2.7

Ireland

2

.4

Illinois

11

2.3

South Africa

2

.4

Washington

11

2.3

France

2

.4

Virginia

10

2.1

Alaska

1

.2

Pennsylvania

9

1.9

Iowa

1

.2

New Jersey

8

1.7

Kansas

1

.2

Florida

7

1.5

Louisiana

1

.2

Washington D.C.

6

1.3

Montana

1

.2

Maryland

6

1.3

Nevada

1

.2

Ohio

6

1.3

New Hampshire

1

.2

Oregon

6

1.3

North Dakota

1

.2

England

6

1.3

South Carolina

1

.2

Idaho

5

1.1

Vermont

1

.2

Massachusetts

5

1.1

West Virginia

1

.2

Wisconsin

5

1.1

Argentina

1

.2

Georgia

4

.8

Brazil

1

.2

Missouri

4

.8

British Columbia

1

.2

New Mexico

4

.8

Canada

1

.2

Australia

4

.8

Denmark

1

.2

Spain

4

.8

Italy

1

.2

Alabama

3

.6

Korea

1

.2

Arizona

3

.6

Mexico

1

.2

Connecticut

3

.6

Russia

1

.2

Minnesota

3

.6

Sweden

1

.2

Wyoming

3

.6

Viet Nam

1

.2

Austria

3

.6

Taiwan

1

.2

Japan

3

.6

Israel

1

.2

Kentucky

2

.4

Jamaica

1

.2

Maine

2

.4

Michigan

2

.4

473

100.0

Total

Note: Foreign countries are highlighted.

16



Age of Sundance Film Festival Attendees All Attendees

Utah Residents

Nonresidents

Response Frequency

Valid Percent

Response Frequency

Valid Percent

Response Frequency

Valid Percent

8

1.7%

4

2.5%

4

1.3%

19 to 25

98

20.8%

39

24.8%

59

18.8%

26 to 35

126

26.8%

36

22.9%

90

28.7%

36 to 45

78

16.6%

25

15.9%

53

16.9%

46 to 55

77

16.3%

23

14.6%

54

17.2%

Over 55

84

17.8%

30

19.1%

54

17.2%

471

100.0%

157

100.0%

314

100.0%

Age Group Under 18

Total

Valid Cases 471 157 314

All Attendees Utah Residents Nonresidents C-6.

Missing Cases 2 0 2

Gender of Sundance Film Festival Attendees All Attendees

Utah Residents

Nonresidents

Response Frequency

Percent

Response Frequency

Percent

Response Frequency

Percent

Male

209

44.2%

68

43.3%

141

44.6%

Female

264

55.8%

89

56.7%

175

55.4%

Total

473

100.0%

157

100.0%

316

100.0%

Gender

C-7.

Educational Attainment Level of Sundance Film Festival Attendees All Attendees

Maximum Level of Attainment High School Graduate

Utah Residents

Nonresidents

Response Frequency

Valid Percent

Response Frequency

Valid Percent

Response Frequency

Valid Percent

90

18.2%

34

22.1

51

16.2%

Bachelor’s Degree

230

49.1%

76

49.4

154

49.0%

Master’s Degree

229

25.4%

33

21.4

86

25.5%

34

7.3%

11

7.1

23

7.3%

468

100.0%

154

100.0

314

100.0%

Doctorate Total

Note: Category of “High School Graduate “includes individuals still in high school.

All Attendees Utah Residents Nonresidents 17


Missing Cases 5 3 2 BUREAU OF ECONOMIC AND BUSINESS RESEARCH


Occupation of Sundance Film Festival Attendees All Attendees

Utah Residents

Nonresidents

Response Frequency

Valid Percent

Response Frequency

Valid Percent

Response Frequency

Valid Percent

Entertainment Professional

105

22.2%

13

8.3%

92

29.2%

Non-entertainment Professional

222

47.0%

78

49.7%

144

45.7%

4

.6%

1

.6%

3

1.0%

Student

54

11.4%

24

15.3%

30

9.5%

Other

87

18.6%

41

26.1%

46

14.3%

472

100.0%

157

100.0%

315

100.0%

Occupation

Press

Total

All Attendees Utah Residents Nonresidents

C-9.


Missing Cases 1 0 1

Household Income of Sundance Film Festival Attendees All Attendees

Utah Residents

Nonresidents

Response Frequency

Valid Percent

Response Frequency

Valid Percent

Response Frequency

Valid Percent

Less than $35,000

96

20.6%

44

28.8%

52

16.6%

$35,000 to $49,999

66

14.2%

23

15.0%

43

13.7%

$50,000 to $99,999

105

22.5%

37

24.2%

68

21.7%

$100,000 to $199,999

119

25.5%

33

21.6%

86

27.5%

80

17.2%

16

10.5%

64

20.4%

466

100.0%

153

100.0%

313

100.0%

Occupation

$200,000+ Total


18


Missing Cases 7 4 3



D. FESTIVAL STATISTICS D-1.

Number of Days Attending the Sundance Film Festival All Attendees

Days of Attendance

Percent

Response Frequency

Percent

Response Frequency

Percent

1

56

11.8%

29

18.5%

27

8.5%

2

63

13.3%

19

12.1%

44

13.9%

3

70

14.8%

26

16.6%

44

13.9%

4

72

15.2%

15

9.6%

57

18.0%

5

65

13.7%

22

14.0%

43

13.6%

6

38

8.0%

10

6.4%

28

8.9%

7

31

6.6%

11

7.0%

20

6.3%

8

18

3.8%

6

3.8%

12

3.8%

9

9

1.9%

4

2.5%

5

1.6%

10

23

4.9%

6

3.8%

17

5.4%

11

28

5.9%

9

5.7%

19

6.0%

473

100.0%

157

100.0%

316

100.0%

Summary Statistics Number of Days Attending the Sundance Film Festival All Attendees

Utah Residents

Non Residents

Mean

4.68

4.43

4.80

Standard Error

.131

.235

.157

Median

4.00

4.00

4.00

Standard Deviation

2.84

2.94

2.79

Variance

8.09

8.64

7.79

473

157

316

0

0

0

Valid Cases Missing Cases

19

Nonresidents

Response Frequency

Total

D-2.

Utah Residents


The Economic Impact of the 2011 Sundance Film Festival D-3.

Number of Intended Screenings All Attendees

Number of Screenings

Valid Percent

Response Frequency

Valid Percent

Response Frequency

Valid Percent

0

25

5.3%

9

5.8

16

5.1%

1

52

11.1%

26

16.7

26

8.3%

2

42

8.9%

19

12.2

23

7.3%

3

49

10.4%

18

11.5

31

9.9%

4

43

9.1%

13

8.3

30

9.6%

5

36

7.7%

15

9.6

21

6.7%

6

39

8.3%

9

5.8

30

9.6%

7

35

7.4%

9

5.8

26

8.3%

8

25

5.3%

6

3.8

19

6.1%

9

16

3.4%

4

2.6

12

3.8%

108

23.0%

28

17.9

80

25.4%

470

100.0%

156

100.0%

314

100.0%

All Attendees Utah Residents Nonresidents D-4


Missing Cases 3 1 2

Summary Statistics Number of Intended Screenings All Attendees

Utah Residents

Non Residents

Mean

5.58

4.80

5.96

Standard Error

.168

.288

.203

Median

5.00

4.00

6.00

Standard Deviation

3.64

3.59

3.60

13.25

12.96

12.98

470

156

314

3

1

2

Variance Valid Cases Missing Cases

20

Nonresidents

Response Frequency

10+ Total

Utah Residents



Location Where Most Screenings Will Be Viewed All Attendees Response Frequency

Place Park City

Utah Residents

Valid Percent

Nonresidents

Response Frequency

Valid Percent

Response Frequency

Valid Percent

358

75.7%

88

56.1%

270

85.4%

Salt Lake City

54

11.4%

41

26.1%

13

4.1%

Ogden

24

5.1%

19

12.1%

5

1.6%

Sundance

10

2.1%

0

--

10

3.2%

Not attending

27

5.7%

9

5.7%

18

5.7%

473

100.0%

157

100.0%

316

100.0%

Total

Note: Not attending includes respondents who indicated they would not attend any screenings during the Festival.

D-6.

All Locations Where Attendees Will View Screenings

All Attendees Place

Utah Residents

Yes

No

Yes

Park City

87.7%

12.3%

70.9%

Salt Lake City

34.8%

65.2%

Sundance

11.2%

Ogden

10.5%

Nonresidents No

Yes

No

29.1%

96.0%

4.0%

45.9%

54.1%

29.2%

70.8%

88.8%

5.4%

94.6%

14.1%

85.9%

89.5%

20.3%

79.7%

5.7%

94.3%

Note: Includes only respondents who intended to view screenings.

D-7.

Nonresidents Visiting Utah Primarily to Attend the Sundance Film Festival Response Frequency

Valid Percent

248

79.2%

65

20.8%

313

100.0%

Yes No Total

Missing Cases:

21

3



First Time Visiting Utah (Nonresidents Only) Response Frequency

Valid Percent

Yes

103

32.7%

No

212

67.3%

Total

315

100.0%

Missing Cases: D-9.

1

Prior Attendance at a Sundance Film Festival All Attendees

Utah Residents

Nonresidents

Response Frequency

Valid Percent

Response Frequency

Valid Percent

Response Frequency

Valid Percent

Yes

264

56.2%

109

69.4%

155

49.5%

No

206

43.8%

48

30.6%

158

50.5%

Total

470

100.0

157

100.0

313

100.0

Prior Attendance


22


Missing Cases 3 0 3


The Economic Impact of the 2011 Sundance Film Festival D-10. Number of Times Previously Attended All Attendees Number of Years Attended

Utah Residents

Nonresidents

Response Frequency

Percent

Response Frequency

Percent

Response Frequency

Percent

1

45

17.0%

8

7.3%

37

23.9%

2

39

14.7%

16

14.5%

23

14.8%

3

35

13.2%

10

9.1%

25

16.1%

4

25

9.4%

11

10.0%

14

9.0%

5

20

7.5%

8

7.3%

12

7.7%

6

27

10.2%

15

13.6%

12

7.7%

7

11

4.2%

6

5.5%

5

3.2%

8

6

2.3%

4

3.6%

2

1.3%

9

4

1.5%

2

1.8%

2

1.3%

10

19

7.2%

11

10.0%

8

5.2%

11

6

2.3%

3

2.7%

3

1.9%

12

7

2.6%

2

1.8%

5

3.2%

13

1

.4%

--

--

1

.6%

14

4

1.5%

3

2.7%

1

.6%

15

4

1.5%

1

.9%

3

1.9%

16

2

.8%

1

.9%

1

.6%

17

2

.8%

2

1.8%

--

--

18

2

.8%

1

.9%

1

.6%

20

3

1.1%

3

2.7%

--

--

23

1

.4%

--

--

--

--

25

2

.8%

2

1.8%

--

--

265

100.0%

109

100.0%

155

100.0%

Total

Note: Distribution does not include participants who have not previously attended the Festival.

23


The Economic Impact of the 2011 Sundance Film Festival D-11. Summary Statistics Number of Previous Visits All Attendees

Utah Residents

Non Residents

Mean

5.49

6.92

4.48

Standard Error

.289

.519

.306

Median

4.00

6.00

3.00

Standard Deviation

.497

.462

.501

265

157

316

0

0

0


D-12. Percent of Attendees Who Plan to Attend a Sundance Film Festival in the Future All Attendees Return to the Festival Yes No Uncertain Total

24

Utah Residents

Response Frequency

Percent

Response Frequency

400

84.6%

152

70

14.8%

3 473

Nonresidents Response Frequency

Percent

96.8%

248

78.5%

4

2.6%

66

20.9%

.6%

1

.6%

2

.6%

100.0%

157

100.0%

316

100.0%

Percent



E. RECREATIONAL ACTIVITIES OF SUNDANCE FILM FESTIVAL ATTENDEES E-1.

Nonresident Attendees Who Intend to Visit Utah Within the Next 12 Months Response Frequency

Percent

Number

Yes

168

53.2%

16,277

No

144

45.6%

13,952

4

1.3%

367

316

100.0%

30,596

Response

Uncertain Total

E-2.

Number of Accompanying Visitors Nonresident Visitors

E-3.

Mean

2.94

Standard Error

.289

Median

2.00

Standard Deviation

2.52

Nonresident Attendees Who Plan to Ski or Snowboard While Attending the Sundance Film Festival Response Frequency

Percent

Number

Yes

126

39.9%

12,208

No/Uncertain

190

60.1%

18,388

Total

316

100.0%

30,596

Response

25


The Economic Impact of the 2011 Sundance Film Festival E-4.

Resorts Where Nonresident Attendees Intend to Ski or Snowboard

Percent

Number

Average Number of Days

Deer Valley

31.0

3,784

2.0

Park City Mountain Resort

48.4

5,909

1.6

The Canyons

16.7

2,039

1.4

4.8

586

1.7

29.4

3,589

2.0

Resort

White Pines Other Utah Resorts

E-5.

Number of Days Skiing or Snowboarding, by Resort

Deer Valley

Park City

The Canyons

White Pines

Other Resorts

Number of Days Skiing

Percent

Percent

Percent

Percent

Percent

0

87.6%

80.7%

93.4%

98.1%

88.3%

1

4.8%

13.0%

4.7%

1.3%

5.7%

2

4.4%

2.8%

1.3%

–

3.5%

3

1.9%

2.2%

.6%

.6%

1.3%

4

.3%

.3%

--

--

.6%

5

1.0%

.6%

--

--

.3%

--

.3%

--

--

.3%

6+

26



F. LODGING AND TRANSPORTATION STATISTICS F-1.

Type of Lodging Used by Nonresident Attendees Response Frequency

Valid Percent

115

36.5

Condo Rental

91

28.9

Friends/Family

58

18.4

Private House

27

8.6

Timeshare

15

4.8

9

2.9

315

100.0

Lodging Type Hotel/Motel

Other Total

Valid Cases

F-2.

315

Missing Cases

Location of Lodging Used by Nonresident Attendees Response Frequency

Location Deer Valley/Park City Area

Valid Percent

231

73.3

Salt Lake County

54

17.1

Sundance Resort

11

3.5

Ogden Area Other Total

Valid Cases

27

1

315

8

2.5

11

3.5

315

100.0

Missing Cases

1


The Economic Impact of the 2011 Sundance Film Festival F-3.

Number of Nights of Lodging (Nonresidents) Number of Nights

Response Frequency

Valid Percent

1

4

1.3

2

12

3.8

3

37

11.8

4

59

18.8

5

55

17.5

6

34

10.8

7

36

11.5

8

13

4.1

6

1.9

10+

9

58

18.4

Total

314

100.0

Valid Cases F-4.

314

Missing Cases 2

Summary Statistics Number of Nights of Lodging (Nonresidents) Nonresident Attendees Mean

5.90

Standard Error

.147

Median

5.00

Standard Deviation

2.60 314


F-5.

2

Primary Form of Transportation to Utah to Attend the Festival (Nonresidents) Mode of Transportation Airplane

Valid Percent

Number

226

72.0%

22,029

Private Vehicle

43

13.7%

4,192

Rental Vehicle

34

10.8%

3,304

Bus

6

1.9%

581

Other

5

1.6%

490

314

100.0%

30,596

Total

Valid Cases 314

28

Response Frequency

Missing Cases 2



G. ECONOMIC IMPACTS OF SUNDANCE INSTITUTE-RELATED SPENDING The economic impacts presented here are based on the operational expenditures made by the Sundance Institute (Institute) in Utah to produce the 2011 Sundance Film Festival. In developing these impacts, only the amount of money the Institute spent in Utah was included. To produce the 2011 Sundance Film Festival, the Institute spent approximately $7.5 million dollars, of which $4.3 million was spent locally. The economic impacts generated by these expenditures are shown below. The detailed spending and impact calculations are presented in Table G-2. G-1.

2011 Sundance Film Festival Economic Impacts of Sundance Institute Spending Direct Impacts

Indirect and Induced Impacts

Total Economic Impacts

Gross State Product

$3,763,690

$4,176,053

$7,939,743

Earnings

$1,393,567

$2,032,231

$3,425,798

232

66

298

Impact Type

Jobs

G-2.

2011 Sundance Film Festival Detailed Economic Impacts of Sundance Institute Spending

Industry Sector Construction

Adj. Utah Spending

Earnings Coefficient

Earnings Impact

Jobs Coefficient

Jobs Impact

Value Added Coefficient

Value Added Impact

$326

.7834

$255

22.29

.01

1.21

$420

Printing Services

$31,354

.6277

$19,681

16.75

.53

1.04

$34,887

Retail Trade

$12,901

.6530

$8,424

23.64

.30

1.21

$16,681

Air Transportation Ground Transportation Insurance Property/Equipment Rental Advertising/Public Relations Business Services

$4,272

.6927

$2,959

15.92

.07

1.10

$5,013

$145,529

.7584

$110,369

26.14

3.80

1.10

$170,371

$10,564

.6896

$7,285

18.49

.20

1.21

$13,682

$823,663

.4663

$384,074

12.98

10.70

1.15

$1,015,247

$2,248

.8319

$16,844

20.37

.41

1.31

$28,343

$72,292

.8319

$60,140

20.37

1.47

1.31

$101,194

Professional/Technical Srvcs.

$430,579

.8319

$358,198

20.37

8.77

1.31

$602,724

Accommodations/Lodging

$536,381

.6101

$327,246

22.74

12.20

1.18

$677,664

Food and Beverage

$282,014

.6596

$186,016

32.96

9.30

1.15

$346,059

Wages/salaries

$1,393,567

.3952

$550,738

13.04

18.18

.83

Totals

$3,763,690

Direct Wages/Salaries: Indirect and Induced Earnings: Total Earnings Impact:

29

$1,393,567 $2,032,231 $3,425,798

$2,032,231

65.94

Direct Employment: Indirect and Induced Employment: Total Employment Impact:

$1,163,768 $4,176,053

232 66 298



Economic Impacts: Measures and Definitions Economic impacts are the changes in the size and structure of a region’s economy that occur when goods and services are purchased from vendors within the region with money generated outside the region. In the strictest interpretation, economic impacts occur only when “new” money enter the regional economy and is then spent locally. Such an inflow has the potential to expand the size and strength of the region’s economy. Money spent outside the region is considered “leakage” and does not generate economic growth within the region. Likewise, purchases of goods and services by local residents from local vendors do not increase the economic base of the region; they simply reshuffle the existing resources. Input-Output Models Various models have been built to evaluate the economic impacts that occur with changes in regional exports. The key inputs to these models are the direct impacts, which are the spending injections into the community when goods produced locally are sold outside the region. One of the most commonly used models for regional impact analysis is the single region input-output (I-O) model. I-O models capture business-to-business purchases within a region. If an export base industry purchases raw materials, equipment or other inputs from local producers, this effectively increases the size of the region’s export base; these are the indirect effects. These inter-industry linkages are captured in an I-O model. I-O models also capture induced spending generated when households supported by the direct and indirect activities purchase goods and services within the region. I-O models simultaneously describe the demand and supply relationships between industries by showing the final demand for goods and services and the inter-industry transactions required to satisfy that demand. Using the construction industry as an example, an I-O model would identify all industries that provide goods and services to the construction industry. The I-O model also shows the value of goods and services provided by each industry directly to the construction industry as well as all industries that are indirect suppliers to the initial supplying industries. These interactions continue until the value of supplies from all producing sectors that provide goods and services to the direct suppliers of the construction industry have been accounted for. This is called the “multiplier” effect. RIMS II RIMS II is the updated version of the Regional Input-Output Modeling System developed by the U.S. Department of Commerce, Bureau of Economic Analysis (BEA) in 1970. RIMS II is based on an accounting framework called an input-output table, which shows the input and output structure of approximately 500 industries in the U.S. The BEA’s regional economic accounts are used to adjust the national I-O table to show a region’s industrial structure and trading patterns.3 RIMS II multipliers can be estimated for any region in the U.S. that is composed of one or more counties, and for any industry or group of industries in the national I-O table.

2

“Regional Input-Output Modeling Systems”, U.S. Department of Commerce, Bureau of Economic Analysis available at www.bea.doc.gov/bea/regional/rims. 30



The impact effects produced using RIMS II are the net changes in value added, earnings and employment that occur when new dollars flow into a region and are then spent locally. The impacts represent the increase in the existing economic base of the region under study.

Estimating Fiscal Impacts The fiscal impacts provided in this analysis were derived two ways. The fiscal impact of visitors spending was estimated by applying the appropriate sales and use tax and other tax rates to total spending. The impact on state income tax was estimated by applying an “average tax” rate or 3.75% to the earnings estimate. The average tax rate was estimated using personal income data from the U.S. Department of Commerce, Bureau of Economic Analysis and income tax collections for the state of Utah as reported in the most current issue of State and Local Government Finances published by the U.S. Census Bureau. The fiscal impacts of spending by the Sundance Institute was estimated by quantifying the relationship between earnings in the state of Utah and selected state and local tax collections Expressed as a ratio representing the effective state and local tax rates, the derived ratio was applied to the total earnings impacts. The effective state rate used in this analysis was 8.65 percent. The effective local rate was 1.98 percent. The fiscal impact estimates for Sundance Institute spending are conservative. Using an effective tax rate methodology to calculate fiscal impacts assumes that state and local taxes are directly related to earnings. While this assumption holds with respect to state income tax, and to a lesser degree, sales tax, the relationship between earnings and other taxes, such as property tax, is less obvious; i.e. an increase in earnings may not affect property tax revenue or other tax revenue. Thus property tax and selected other taxes were not used in estimating the effective state and local tax ratios.

Definitions Used in This Report Conceptually, economic impacts fall into three categories: direct, indirect and induced. The type of impacts generated include value added, earnings and jobs. These terms are defined below: Direct Effects. The direct effects include (1) purchases of goods and services from local suppliers, and (2) wage and salary payments to employees. Indirect Effects. The indirect effects are the additional business sales, jobs and income generated by direct purchases of goods and services from local suppliers. The purchases of these suppliers create subsequent rounds of spending, which when added to the initial suppliers’ purchases represent the total indirect effects. Induced Effects. The induced effects result when employees of the company making the direct purchases and employees of suppliers spend their earnings. Gross State Product/Value Added. The additional value of a commodity over the cost of the commodities used to produce it from the previous stage of production. Value added is, conceptually, equivalent to Gross State Product (GSP).

31



Earnings. Earnings are the sum of three components of personal income—wage and salary disbursements, supplements to wages and salaries, and proprietor’s income. Jobs. Jobs generated using RIMS II include both full-time and part-time workers as well as the self-employed.

32
