In this paper, the author develops two main issues. Firstly, the author identifies the nature of the social and economic benefits that investment in the arts might bring to a local region. Secondly, the author suggests that the magnitude of these social effects can be measured, and that appraisal of local investments in this and similar areas can use the results of research into the demand for public goods, in particular by attempting to measure the community's willingness to pay for such goods and by incorporating these measurements into a cost-benefit calculus.