nep-cul New Economics Papers
on Cultural Economics
Issue of 2008‒04‒15
five papers chosen by
Roberto Zanola
University of the Piemonte Orientale

  1. Do creative industries cluster? Mapping Creative Local Production Systems in Italy By Luciana Lazzeretti; Rafael Boix Domenech; Francesco Capone
  2. Deterministic Adoption in Movie Industry By Chng, Kean Siang; Lean, Hooi Hooi
  3. Targeted Advertising: The Role of Subscriber Characteristics in Media Markets By Chandra, Ambarish
  4. Mergers in Two-Sided Markets: An Application to the Canadian Newspaper Industry By Chandra, Ambarish; Collard-Wexler, Allan
  5. Will drought erode the competitiveness of Australia's wine industry? By Glyn Wittwer

  1. By: Luciana Lazzeretti (Dept. of Business Economics, University of Florence); Rafael Boix Domenech (Departament d'Economia Aplicada, Universitat Autonoma de Barcelona); Francesco Capone (Dept. of Business Economics, University of Florence)
    Abstract: An important debate on the role of creativity and culture as factors of local economic development is distinctly emerging. Despite the emphasis put on the theoretical definition of these concepts, it is necessary to strengthen comparative research for the identification and analysis of the kind of creativity embedded in the territory as well as its determinants. Creative local production systems are identified in Italy and Spain departing from local labour markets as territorial units, and focusing on two different kinds of creative industries: traditional cultural industries (publishing, music, architecture and engineering, performing arts) and technology-related creative industries (R&D, ICT, advertising). The results suggest the existence of different patterns of concentration of creative industries in both countries and the concentration of creative industries in the
    Keywords: creative industries, creative local systems, agglomeration economies
    JEL: L22 R12 L82
    Date: 2008–03
  2. By: Chng, Kean Siang; Lean, Hooi Hooi
    Abstract: In this paper, we investigate the decision making process by movie goers. Under incomplete information environment, movie goers will have to learn the quality of the movie from the information relayed by predecessors. The hypothesis is formed by the movie goers when the movie is first released, and it is then compared to information received. In this environment, movie goers will constantly upgrade the belief system, or discard the weaker ones if found to be not consistent with the overall quality information received. Thus, positive news relayed in the initial stage will be magnified to greater importance; the movie becomes a hit. We model this deterministic adoption with first order difference equation. We find that the Hit movies exhibit higher deterministic adoption behavior and the relationship between current and previous adoptions can last longer, than if the movie is a flop. The time path or orbit of the dynamic growth also exhibits non-oscillatory behavior and converge to equilibrium level quickly; when the deterministic adoption mechanism loses its strength, the subsequent adoptions will eventually die off. In other words, the previous adoptions cannot determine the future adoptions. Although this behavior is present in both Hit and Non-hit movies, this diminishing mechanism is triggered in much earlier stage in Non-hit movies than it is in Hit movies.
    Keywords: deterministic adoption; learning; movie; consumption behavior
    JEL: L82 D01
    Date: 2007–10
  3. By: Chandra, Ambarish
    Abstract: This paper seeks to establish the importance of targeted advertising in media markets. Using zip-code level circulation for US daily newspapers, I show that newspapers facing more competition have lower circulation prices but higher advertising prices than similar newspapers facing little or no competition. I explain this by showing that newspapers in more competitive markets are better able to segment readers according to their location and demographics. This leads to greater homogeneity in the characteristics of subscribers and raises advertisers' willingness to pay for such readers. The results imply a substantial benefit to advertisers and media firms from targeted advertising.
    Keywords: Targeted Advertising; Media Markets; Newspapers; Media Segmentation
    JEL: D4 L1
    Date: 2008–03
  4. By: Chandra, Ambarish; Collard-Wexler, Allan
    Abstract: In this paper we study mergers in two-sided industries. While mergers have been studied extensively in traditional industries, and there is a large and rapidly evolving literature on two-sided markets, there has been little work empirically examining mergers in these markets. We present a model that shows that mergers in two-sided markets may not necessarily lead to higher prices for either side of the market. We test our conclusions by examining a spate of mergers in the Canadian newspaper industry in the late 1990s. Specifically, we analyze prices for both circulation and advertising to try to understand the impact that these mergers had on consumer welfare. We find that greater concentration did not lead to higher prices for either newspaper subscribers or advertisers.
    Keywords: Mergers; Two-Sided Markets; Newspapers
    JEL: D43 L4
    Date: 2008–03
  5. By: Glyn Wittwer
    Abstract: Australia's 2007 vintage was smaller than the previous few vintages as a consequence of drought and frost in 2006. Then the worst happened in the following year with an unprecedented second year of drought that resulted in severe cuts to water allocations for irrigators in the southern Murray-Darling Basin. This paper examines the medium-term prospects for the Australian wine industry using global projections to 2016 with the World Wine Model. The international growth prospects of commercial-premium wine matter to growers in irrigated regions of Australia. Overall, demand for commercial-premium wine is set to grow. This is despite a slowing of growth in Australia's number one market, the United Kingdom.
    Keywords: CGE modelling, wine consumption
    JEL: C68 Q13
    Date: 2008–03

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