Here’s how the true value of the Sydney Opera House – a national icon that inspired 90 per cent of Chinese tourists to visit the city – was calculated.
My father’s favourite aphorism was an Oscar Wilde gem that might have been written by a Sydneysider. “He knows the price of everything,” Dad would scoff, “and the value of nothing.”
This figure is not derived purely from balance sheets. It’s calculated by a team of big-brained economists using a complex equation that combines revenue, digital assets, and willingness-to-pay analysis with qualitative research to assess the Opera House’s social and brand value to global audiences. A corporate adviser and lawyer in her past life, she knew the importance of demonstrating return on investment for a partly government-funded institution, and was looking for a framework to longitudinally track her program’s financial impact.O’Mahony and I built upon Herron’s initial request to simply update previously published dollars-generated research on the House.
And our consumer surplus calculation identified an added-value force-field: Opera House performances were, intriguingly, valued almost 40 per cent more than the ticket price. That meant someone with a $100 ticket to see Kraftwerk at the Opera House would be actually willing to pay $138 for the experience.
Would fewer tourists in an era of streamed concerts see the House’s value deteriorate? And had its disruptive building program and long closures to remodel the Concert Hall and Joan Sutherland Theatre – the House’s left and right ventricles – alienated audiences?The current social value of $11.4 billion reflects a more-than-healthy 38 per cent growth in real terms in the past 10 years – a result most business leaders would crawl over broken glass to deliver.
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