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Frequently Used Terms <br />Cultural Tourism <br />Travel directed toward experiencing the arts, heritage, and special character of a place. <br />Direct Economic Impact <br />A measure of the economic effect of the initial expenditure within a community. For example, when the <br />symphony pays its players, each musician's salary, the associated government taxes, and full-time equivalent <br />employment status represent the direct economic impact. <br />Direct Expenditures <br />The first round of expenditures in the economic cycle. A paycheck from the symphony to the violin player and a <br />ballet company's purchase of dance shoes are examples of direct expenditures. <br />Econometrics <br />The process of using statistical methods and economic theory to develop a system of mathematical equations that <br />measures the flow of dollars behveen local industries. The input-output model developed for this study is an <br />example of an econometric model. <br />Econometrician <br />An economist who designs, builds, and maintains econometric models. <br />Full -Time Equivalent (FTE) Jobs <br />A term that describes the total amount of labor employed. Economists measure FTE jobs—not the total number of <br />employees—because it is a more accurate measure of total employment. It is a manager's discretion to hire one <br />full-time employee, two half-time employees, four quarter -time employees, etc. Almost always, more people are <br />affected than are reflected in the number of FTE jobs reported due to the abundance of part-time employment, <br />especially in the nonprofit arts and culture industry. <br />Indirect and Induced Economic Impact <br />This study measures the economic impact of the arts using a methodology that enables economists to track how <br />many times a dollar is respent within the local economy, and thus to measure the economic impact generated by <br />each round of spending. When a theater company purchases paint from the local hardware store, there is a <br />measurable economic effect of that initial expenditure within a community. However, the economic benefits <br />typically do not end there, because the hardware store uses some of its income to pay the clerk that sold the paint, <br />as well as to pay its electric bill and to re -stock the shelves. The indirect and induced economic impacts are the <br />effects of the subsequent rounds of spending by businesses and individuals, respectively. (See the example on <br />Page 5 of this report.) <br />AMERICANS FOR THE ARTS I Arts & Economic Prosperity 5 25 <br />