Entertainment and the Economy

While not all entertainment events will receive positive critical acclaim, a supportable case can be made very readily that "It's all good" in terms of what entertainment means for the economy. The "entertainment industry" is a diverse collection of individuals, small businesses, not-for-profit organizations and large corporations. When economists talk about the economic impact of various activities and industries, it is common to hear them talk about the "multiplier effect". This is an attempt to measure how money initially spent on things like payroll for performers in a Broadway play ends up having a much bigger impact on the local, regional and national economy than just the initial expenditures for producing the play. In comparison to other industries, entertainment activities have one of the biggest ripple effects throughout the entire economy. Unfortunately this means that while increases in spending for entertainment are felt in a positive way throughout the economy, decreases in entertainment expenditures can have a noticeable negative impact.