Measuring the impact of the European Capital of Culture programme on overnight stays: evidence for the last two decades

Abstract

This study explores the effects of the European Capital of Culture (ECoC) on tourism demand, measured as overnight stays, for the years 1998–2014. The analysis includes 34 ECoC hosts and makes use of data on approximately 800 European cities. A difference-in-differences propensity score matching estimator shows that hosting the ECoC leads to an increase in overnight stays of 8% on average during the year of the event but does not stimulate tourism demand in subsequent years. To account for deviations in the distribution of tourism inflows between ECoC and other cities, the quantile difference-in-differences estimator is used. This leads to similar but somewhat stronger results, especially for the year of the event and for the year after. Separate estimations of ECoC hosts reveal that there is a certain degree of heterogeneity in the effect. Long-term impacts can only be observed for a small group of cities (Essen, Guimarães, Salamanca and Tallinn).