Jefferson County Development Authority executive director Jane Peters said no study has been done on the economic impact on the county, but "I'd say it's pretty substantial."
"First you've got the cast and crew staying in the area, living here, eating," she said. "Then the biggest impact would be the audience drawn from outside of the area."
The theater festival also gives the development authority something else to tout when working to bring new companies into the county, she said.
"It's a wonderful thing to have - both culturally and economically," Peters said. "The festival is something that really adds to the cultural atmosphere here. The whole quality of life is one of the things companies look at when determining where to locate."
Raymond Staubs, owner of Tony's Pizza Den in Shepherdstown, said he's seen customers already brought to town by the festival.
"We're busy all the time. It's good for the business," he said. "It keeps the town moving, keeps things going in the summer."
Local art galleries see an increase in customers with money in their wallets, gallery workers said.
Roni Lavache, manager at Dickinson and Wait Craft Gallery, said the festival brings people into Shepherdstown who otherwise would not visit.
While in town, they visit the local shops. Since theatergoers tend to be people from a higher income bracket, they have money to spend on art work, she said.
Producing director Ed Herendeen said the economic boost to Shepherdstown was not the intention of the festival when it started, but he's glad to see it happening.
Herendeen said that at a time when many in Congress have talked about cutting funding for the arts, the boost the festival gives to local businesses is a sign of how important the arts can be.
Mark Outhier, owner of the Mecklenberg Inn, said business at his tavern and bed and breakfast remains good throughout the summer even when the festival is not in town.
He sees some increase in customers from the actors and staff coming in months before the festival starts and also from the tourists in town for the festival.
"I think it helps the town economically and it's one of the reasons people live in the town," Outhier said. "It's not just a sleepy little town where nothing goes on. The festival is one of the things that makes the town an interesting place to live."