nep-cul New Economics Papers
on Cultural Economics
Issue of 2005‒09‒29
six papers chosen by
Roberto Zanola
Universita degli Studi del Piemonte Orientale

  1. The Making of Cultural Policy: A European Perspective By Frederick van der Ploeg
  2. The Media and Advertising: A Tale of Two-Sided Markets By Anderson, Simon P; Gabszewicz, Jean Jaskold
  3. Determining Heterogeneous Behaviour for Theater Participation By Victoria Ateca-Amestoy
  4. Relevant Market and Pricing Behavior of Regional Newspapers in the Netherlands By Kranenburg,Hans,van
  5. Abracadabra! Social Norms and Public Perceptions through Harry Potter’s Looking Glasses By Avichai Snir; Daniel Levy
  6. Is Software Piracy a Middle Class Crime? Investigating the inequality-piracy channel By Justina A.V. Fischer; Antonio Rodríguez Andrés

  1. By: Frederick van der Ploeg
    Abstract: No good comparable data on sizes of cultural sectors of the countries of Europe exist. Still, local and national governments of Europe spend substantial resources on culture and cultural sectors contribute significantly to employment and national income. After briefly describing special features of cultural goods and clarifying some misconceptions about the value of culture, valid and invalid arguments for subsidising culture are discussed. Although it is easy to justify government support for preservation of heritage, this is more difficult for the performing arts. Due to changing technologies and advent of E-culture classic public-good arguments for government intervention in broadcasting and other cultural activities become less relevant. Different institutions varying from selection by arts councils, bureaucrats or politicians to less directed tax incentives lead to different cultural landscapes. Theories of delegation suggest delegating the judgement on artistic qualities and execution of cultural policy to an independent Arts Fund. The Minister of Culture should concentrate on formulating a mission for cultural policy and make sure it is implemented properly. The insights of the theories of local public goods and federalism are applied to the making of cultural policy in Europe. Different approaches to international cultural policy in Europe are discussed. The overview concludes with lessons for the making of cultural policy in Europe.
    Keywords: cultural policy, heritage, performing arts, museums, quality, participation, vouchers, tax incentives, quality, politicians, bureaucrats, delegation
    JEL: H20 H40 P51 Z11
    Date: 2005
  2. By: Anderson, Simon P; Gabszewicz, Jean Jaskold
    Abstract: Media industries are important drivers of popular culture. A large fraction of leisure time is devoted to radio, magazines, newspapers, the Internet, and television (the illustrative example henceforth). Most advertising expenditures are incurred for these media. They are also mainly supported by advertising revenue. Early work stressed possible market failures in program duplication and catering to the Lowest Common Denominator, indicating lack of cultural diversity and quality. The business model for most media industries is underscored by advertisers’ demand to reach prospective customers. This business model has important implications for performance in the market since viewer sovereignty is indirect. Viewers are attracted by programming, though they dislike the ads it carries, and advertisers want viewers as potential consumers. The two sides are coordinated by broadcasters (or 'platforms') that choose ad levels and program types, and advertising finances the programming. Competition for viewers of the demographics most desired by advertisers implies that programming choices will be biased towards the tastes of those with such demographics. The ability to use subscription pricing may help improve performance by catering to the tastes of those otherwise under-represented, though higher full prices tend to favour broadcasters at the expense of viewers and advertisers. If advertising demand is weak, program equilibrium program selection may be too extreme as broadcasters strive to avoid ruinous subscription price competition, but strong advertising demand may lead to strong competition for viewers and hence minimum differentiation (la pensee unique). Markets (such as newspapers) with a high proportion of ad-lovers may be served only by monopoly due to a circulation spiral: advertisers want to place ads in the paper with most readers, but readers want to buy the paper with more ads.
    Keywords: advertising finance; circulation spiral; pensee unique; platform competition; two-sided markets
    JEL: D43 L13 L82 M37 Z11
    Date: 2005–09
  3. By: Victoria Ateca-Amestoy
    Abstract: We study the determinants of the demand of cultural goods using two different approaches. Starting by a simple analytical model that deals with the optimal demand of cultural goods for a consumer that lives two periods, we investigate the relevance of cultural capital on taste formation. Some testable hypothesis on the effects of the parameters of the model are derived. Futher, in a companion paper we perform some analysis on temporal paths and on the effect of cultural policy measures. We then propose and stimate a model on theatre participation using the data contained on the 2002 Survey of Public Participation in the Arts from the USA. By using a Zero Inflated Negative Binomial model, we can characterized two distinct behaviours for the observable demand.
    Keywords: Cultural economics, Participation in the arts, Zero Inflated Negative Binomial Regression
    Date: 2005
  4. By: Kranenburg,Hans,van (METEOR)
    Abstract: The aim of this study is to investigate the effect of market structure and area characteristics on the subscription prices and advertising rates for regional newspapers in the Netherlands. The price-market structure analysis in this study shows that there exists a negative relationship between market structure and prices. The results also show that advertising rates, differently to subscription prices, are significantly influenced by regional income and particularly by population density in the specific area. Furthermore, the evidence indicates that the relevant market for regional newspapers in the Netherlands is a market which encompasses regional newspapers, national newspapers and other media sources.
    Keywords: Strategy;
    Date: 2005
  5. By: Avichai Snir (Bar-Ilan University); Daniel Levy (Bar-Ilan University)
    Abstract: Economic organization of the imaginary worlds depicted in popular literary works may be viewed as a mirror to public opinion on the economic organization of life. If a book becomes a best-seller, it is because the book conveys messages, feelings, and events the readers can relate to. In other words, the book’s readers identify with the set of norms and rules that govern the development of the plot and the actions of its heroes. Therefore, a best seller, as a book that successfully relates to readers of its time, can teach us on the norms and believes of its audience. Following this line of thought, we use the method of deconstruction to analyze the highly successful J.K. Rowlings’ Harry Potter series. Studying the books within their social context allows us to learn about people’s norms, and their perceptions of issues such as the role of government, the structure of financial markets, poverty and inequality, etc. Thus, by looking at the Potterian economy through magnifying glasses, we obtain a perspective on what people might view as an ideal economic structure. Some aspects of this ideal world, we find, are quite different from the real world.
    Keywords: Social Norms, Social Organization of Economic Activity, Harry Potter, Literature
    JEL: A13
    Date: 2005–09–21
  6. By: Justina A.V. Fischer; Antonio Rodríguez Andrés
    Abstract: This paper uses a sample of 71 countries in a cross-country context to empirically analyze the relationship between income distribution and software piracy rates. It measures income inequality by the Gini coefficient and alternatively by quintile shares. This analysis remedies previous econometric studies by controlling for a wide range of factors that potentially influence national piracy rates and employing an instrumental variables approach. Results indicate that income inequality is negatively associated with piracy rates but also that the impact of various income classes on piracy rates may depend on the geographic region where a country is located. Moreover, the model predicts an inverted U-shaped relationship between piracy and per capita income and reveals an apparent inverse relationship between individualism and software piracy. In addition, the results seem robust to the inclusion of additional covariants often employed in predicting piracy rates and the occurrence of property crime.
    JEL: K42 K11 D3
    Date: 2005–08

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