"Waterfalls" Trickle-Down Theory: Did Eliasson Really Generate $69 Million for the City?

Beneath the Brooklyn Bridge, one of the four Eliasson waterfalls at dusk

The New York City government's number crunchers are at it again, trying to quantify the "economic impact" of a public art project whose chief value was not monetary but aesthetic and experiential---Olafur Eliasson's "Waterfalls."

In announcing that "Waterfalls" had "an estimated economic impact of $69 million, exceeding the initial estimate of $55 million," the wonks at the city's Economic Development Corporation again employed the same dubious methodology that they used three and a half years ago to quantify the supposed financial benefit of Christo's and Jeanne Claude's "The Gates." That 16-day project was said to have generated an economic impact of more than $80 million. "Waterfalls" lasted slightly less than four months, but had more limited viewing hours.

I adored both these projects. "The Gates's" transformation of Central Park and the heightening of one's perception of its topography, induced by the parade of billowing saffron sentinels, was unforgettably uplifting. And this summer, dining on a restaurant terrace overlooking the harbor both before and after sunset (when I could see the cascades illuminated), I was enchanted by the wacky incongruity of the torrents that seemed to be emanating from such improbable sources---otherwise unexceptional buildings and, most memorably, the underside of the Brooklyn Bridge.

But for some, enchantment is just not enough: Using the controversial "multiplier effect," which takes into account how money generated by the project trickles down to other businesses, the city reported that "Waterfalls" involved "$15.5 million in direct spending on the exhibition's total presentation (including building materials, construction, operation, disassembly, and promotional and educational materials); an estimated $26.3 million in incremental visitor spending; and an estimated $26.8 million in indirect spending from these expenditures." (For example, waiters tipped by Waterfalls tourists would, in turn, spend that money at local stores, causing a ripple effect.)

I called into question that method of analysis in my 2005 Wall Street Journal report on "The Gates," by relying on what was then a new study by the RAND Corp. The study's authors asserted that economic arguments for the arts falter "if other activities are better at achieving the same effects." In other words, new sports stadiums might create "more bang for the buck" than new concert halls.

As for the "multiplier effect," the RAND study stated that the fallacy in counting such "spillover benefits" is that they may not be "a net addition to a local economy," but merely "a substitute for other types of spending."

If you're REALLY want to immerse yourself in "Waterfalls" wonkery, you can read the entire 28-page economic impact report. What, we wonder, was the economic impact of compiling this lavishly illustrated, pie-charted document?

I think we need to get back to basics: This is about the art, not the money. The RAND study suggested that what really matters is how these projects "add value to people's lives." One "obvious example" they said, is "sheer joy."

That works for me.