by Madeleine Reinhard

Abstract

This paper studies the effects of arts organizations on local socioeconomic development at the U.S. ZIP code tabulation area (ZCTA) level. While prior studies have qualitatively examined the impact of the arts industry or artistic individuals on their communities, few have approached this question econometrically, and even fewer have investigated the effects of arts organizations specifically. My analysis examines data from Southern Methodist University’s Cultural Data Profile, which contains financial and programmatic information through an online survey on nonprofit arts, culture, and humanities organizations, combined with American Community Survey 5-year estimates for a variety of ZCTA-level demographic and economic measures. First difference regressions estimate how the founding of arts organizations over recent five- and 10-year periods impacts gentrification, economic health, racial demographics, median home value, and resident displacement over the corresponding period. During 2012-2022, new arts organizations are estimated to affect all of these categories, most strongly in urban areas. This conclusion largely holds for both of the encompassed five-year periods as well. Specifically, when more arts organizations are founded, community gentrification levels, economic development, and home values all increase, but these socioeconomic improvements are accompanied by reduced racial diversity.

Professor Jeffrey DeSimone, Faculty Advisor
Professor Grace Kim, Faculty Advisor
Professor Michelle Connolly, Faculty Advisor

JEL Codes: J11, Z11

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