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A Critical Reflection of Guggenheim’s Return on Investment in Bilbao
Beatriz Plaza University of the Basque Country UPV/EHU
Karlsruhe, 11 November 2016 v1
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Overnight stays of Foreign Visitors to Biscay (monthly data 1976 M01-2016M09)
Source: INE
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City External
Accessibility
Source: ESPON
Source: Plaza (2014) Work in progress.
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The Economics of Cultural Images:
Demand: Increasing returns to utility (addiction)
Supply: Marginal Costs close to zero
Sustainability: Quality of cultural programming
The Guggenheim Museum Bilbao-driven networks
1991-1995:
red = Degree
Centrality >0.4
• GUGGENHEIM BILBAO (n1) is directly connected to only 18% of the nodes
• BILBAO (n12) to only 22%.
• Central positions: PICASSO (n48), the GUGGENHEIM NEW YORK (n2) and FRANK LLOYD WRIGHT (n36).
1999-2003:
red = Degree
Centrality >0.6
• GUGGENHEIM BILBAO (n1) is now directly connected to 67% of the nodes, and BILBAO (n12) to 75%.
• Central positions: PICASSO (n48), the GUGGENHEIM NEW YORK (n2) and FRANK LLOYD WRIGHT (n36), with FRANK GEHRY (n13) joining them.
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image accumulation process
(accumulation of semantic connections and mental associations)
drives long-term branding
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News items on the Guggenheim Museum Bilbao (accumulated)
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Impact of visibility in online newspapers on the number of visitors
EWACE 2013 11
where:
Bivariate Structural Time Series Model
EWACE 2013 12
Variable r(1) r(4) Q(4) H(23) JB R2
S
Domestic visitors 0.1064 0.0543 2.6071 0.2617 0.4344 0.5951
Foreign visitors 0.0039 -0.1047 3.5403 0.2848 4.8828 0.6109
Table 1. Estimation results on visibility on the Internet
Table 2. Diagnostics tests
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Plaza, Glez-Casimiro,Moral-Zuazo, Waldron (2015) Culture-led city brands as economic engines: theory and empirics.
The Annals of Regional Science, 54, 179-196.
Economic value of GMB brand: between 15% and 20% of total impact
14 Source: Plaza and Haarich (2015)
Guggenheim-Bilbao driven networks
MULTIPLE REGRESSION QAP VIA DOUBLE DEKKER SEMI-PARTIALLING
--------------------------------------------------------------------------------
# of permutations: 50000
Diagonal valid?: NO
Dependent variable: 9903_BIN
MODEL FIT
R-Square Adj R-Sqr P-Value Obs Perms
------------ ------------ ------------ ------------ ------------
Model 0.374 0.374 0.000 10712 50000
REGRESSION COEFFICIENTS
Un-Stdized Stdized Coef P-value As Large As Small Std Err
------------ ------------ ------------ ------------ ------------ ------------
DIFF0391 0.73180 0.61149 0.00002 0.00002 1.00000 0.02827
Intercept 0.20666 0.00000 0.00000 0.00000 0.00000 0.00000
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Google Analytics
Source: Plaza (2011, 2012)
17 Source: Aranburu, Plaza and Esteban (2016)
GPS
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Year
Rest of
Spain +
Foreign
Visitors
Taxes:
Additional
Revenue
due to GMB
€
Deficit GMB
€
GMB's deficit
plus
Amortization €
Purchase of
the
Permanent
Collection €
Cash-flows
Public
Treasury €.
Permanent
Collection
NOT included
Net Present
Value at a 6%
discount rate.
Permanent
Collection
NOT included
Cash-flows
Public
Treasury €.
Permanent
Collection
included
Net Present
Value at a 6%
discount rate.
Permanent
Collection
included
-32.310.411 -126.495.018 -158.805.429
1.997 178.871 5.871.888 -9.967.820 -7.573.328 -4.240.000 -1.701.440 -120.849.198 -5.941.440 -155.104.302
1.998 901.968 28.962.524 -5.484.236 -3.089.743 -4.240.000 25.872.781 -99.125.912 21.632.781 -136.941.002
1.999 878.587 28.292.760 -5.919.903 -3.525.411 -4.240.000 24.767.349 -79.507.852 20.527.349 -120.681.419
2.000 809.250 26.306.611 -5.818.225 -3.423.733 -4.240.000 22.882.878 -62.408.434 18.642.878 -106.750.376
2.001 771.900 25.236.718 -6.823.670 -4.429.178 -4.240.000 20.807.540 -47.739.940 16.567.540 -95.070.914
2.002 706.851 23.373.393 -7.607.253 -5.212.761 -4.240.000 18.160.632 -35.662.082 13.920.632 -85.812.899
2.003 750.923 24.635.834 -7.819.132 -5.424.640 -4.240.000 19.211.194 -23.608.741 14.971.194 -76.419.787
2.004 836.412 27.084.682 -7.534.776 -5.140.284 -6.000.000 21.944.398 -10.619.886 15.944.398 -66.982.322
2.005 907.177 29.111.738 -7.760.819 -5.366.327 -6.000.000 23.745.411 2.639.428 17.745.411 -57.073.377
2.006 948.248 30.288.204 -6.661.370 -4.266.878 -6.000.000 26.021.326 16.347.138 20.021.326 -46.526.392
2.007 942.785 30.131.735 -9.605.695 -7.211.203 -6.000.000 22.920.532 27.737.940 16.920.532 -38.117.406
2.008 894.287 28.742.497 -9.893.866 -7.499.374 -6.000.000 21.243.123 37.697.545 15.243.123 -30.970.835
2.009 885.344 28.486.328 -10.190.682 -7.796.190 -6.000.000 20.690.138 46.848.813 14.690.138 -24.473.373
2.010 876.491 28.232.721 -10.496.403 -8.101.910 -6.000.000 20.130.811 55.248.697 14.130.811 -18.577.079
2.011 867.726 27.981.649 -10.811.295 -8.416.802 -6.000.000 19.564.847 62.950.326 13.564.847 -13.237.328
2.012 859.048 27.733.089 -11.135.634 -8.741.141 -6.000.000 18.991.948 70.003.260 12.991.948 -8.412.581
2.013 850.458 27.487.014 -11.469.703 -9.075.210 -6.000.000 18.411.804 76.453.721 12.411.804 -4.064.182
2.014 841.953 27.243.400 -11.813.794 -9.419.301 -6.000.000 17.824.099 82.344.817 11.824.099 -156.164
2.015 833.534 27.002.222 -12.168.208 -9.773.715 -6.000.000 17.228.507 87.716.747 11.228.507 3.344.938
2.016 825.198 26.763.456 -12.533.254 -10.138.761 -6.000.000 16.624.695 92.606.991 10.624.695 6.470.249
2.017 816.946 26.527.077 -12.909.251 -10.514.759 -6.000.000 81.313.206 115.171.820 239.973.940 73.064.240
Economic Valuation of the Guggenheim Museum Bilbao to the Public Treasuries
Source: Plaza (2006)
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Source: Plaza (2006)
Thank you very much!!
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Plaza, B. (1999) The Guggenheim-Bilbao Museum Effect: A Reply. International Journal of Urban and Regional Research 23(3), 589-92.
Plaza, B. (2000a) Evaluating the Influence of a Large Cultural Artifact in the Attraction of Tourism. Urban Affairs Review 36(2), 264-274.
Plaza, B. (2000b) Guggenheim Museum's Effectiveness to Attract Tourism. Annals of Tourism Research 27(4), 1055-1058.
Plaza, B.(2002) A note on "Panorama of the Basque country and its competence for self-government": Terrorism and the Guggenheim Museum Bilbao effect. European Planning Studies 10(3), 383-389.
Plaza, B. (2006) The Return on Investment of the Guggenheim Museum Bilbao. International Journal of Urban and Regional Research, 30(2), 452–467.
Plaza, B. (2007) The Bilbao Effect. Museum News, September/October, 13-16. American Association of Museums.
Plaza, B. (2008) On some Challenges and Conditions for the Guggenheim Museum Bilbao to be an Effective Economic Re-activator. International Journal of Urban and Regional Research, 32 (2), 506-517.
Plaza, B and SN Haarich (2009) Museums for urban regeneration? Exploring conditions for their effectiveness. Journal of Urban Regeneration and Renewal, 2(3), 259-271.
Selected References
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Plaza B, Tironi M and Haarich SN (2009) Bilbao’s Art Scene and the “Guggenheim effect” revisited. European Planning Studies 17(11), 1713-1731.
Plaza, B (2009) Monitoring web traffic source effectiveness with Google Analytics An experiment with time series. Aslib Proceedings 61(5), 474-482.
Plaza, B (2010) Valuing Museums as Economic Engines: Willingness to Pay or Discounting of Cash Flows? Journal of Cultural Heritage, 11(2), 155-162.
Plaza, B. (2010) Google Analytics for measuring website performance. Tourism Management, 32(3), 477-481.
Plaza, B., Gonzalez-Flores, A. & Galvez-Galvez, C. (2011)Testing the employment impact of the Guggenheim Museum Bilbao via TSA. Tourism Economics, 17(1), 223-229.
Plaza, B., Haarich, S. N., & Waldron, C. M. (2013) Picasso's Guernica: The Strength of an Art Brand in Destination e-Branding. International Journal of Arts Management, 15(3).
Plaza, B., Galvez-Galvez, C., & Gonzalez-Flores, A. (2013) Urban regeneration and knowledge-intensive services. Proceedings of the Institution of Civil Engineers. Municipal engineer,166(4), 257-264.
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Plaza, B., & Haarich, S. N. (2015) The Guggenheim Museum Bilbao: between regional embeddedness and global networking. European Planning Studies, 23(8), 1456-1475.
Plaza, B., González-Casimiro, P., Moral-Zuazo, P., & Waldron, C. (2015) Culture-led city brands as economic engines: theory and empirics. The Annals of Regional Science, 54(1), 179-196.
Heidenreich, M., & Plaza, B. (2015). Renewal through culture? The role of museums in the renewal of industrial regions in Europe. European Planning Studies, 23(8), 1441-1455.
Aranburu, I., Plaza, B., & Esteban, M. (2016). Sustainable Cultural Tourism in Urban Destinations: Does Space Matter?. Sustainability, 8(8), 699.
