nep-cul New Economics Papers
on Cultural Economics
Issue of 2012‒10‒13
eleven papers chosen by
Roberto Zanola
University Amedeo Avogadro

  1. The impact of investment in cultural heritage By Faroek Lazrak; Piet Rietveld; Jan Rouwendal
  2. Management of the Greek’s ekistics and cultural heritage in Turkey By Eleni Gavra; Anastasia Bourlidou; Klairi Gkioufi
  3. On prisoner's dilemmas and gilded cages: The economics of heritage preservation By Gabriel Ahlfeldt; Kristoffer Möller; Sevrin Waights; Nicolai Wendland
  4. The Market for Paintings in the Venetian Republic from Renaissance to Rococò By Federico Etro; Laura Pagani
  5. The complicated relationship between leisure, culture and tourism from the perspective of the quality of urban life By Eva Psatha; Alex Deffner
  6. The Effects of Introducing Advertising in Pay TV: A Model of Asymmetric Competition between Pay TV and Free TV By Helmut M. Dietl; Markus Lang; Pannlang Lin
  7. Regional development and creativity By Emanuela Marrocu; Raffaele Paci
  8. The approaches on supporting creativity as a stimulus of developing local economy By Dana Bajusova; Maria Spesova; Elena Zarska
  9. Television and Contraceptive Use – Panel Evidence from Rural Indonesia By Jörg Peters; Christoph Strupat; Colin Vance
  10. Does the Creative Class Affect Land Values? Empirical Estimates from Sweden By Zoltan Kettinger; David Emanuel Andersson
  11. Does Regulation Drive Competition? Evidence from the Spanish Local TV Industry By Ricard Gil; Mitsukuni Nishida

  1. By: Faroek Lazrak; Piet Rietveld; Jan Rouwendal
    Abstract: Cultural heritage is generally considered to be an important amenity that makes a city more attractive to residents as well as tourists. Although heritage is basically something that remains from the past, and is therefore predetermined, its quantity and quality is affected by urban policy. Currently many cities invest in heritage. This paper contributes to the analysis of the role of cultural heritage in urban economies by investigating the impact of a national program that subsidizes investment in cultural heritage on the value of real estate in the proximity. We use detailed information about the size of the investments (and associated subsidies) on specific properties to study its impact on house prices in the neighbourhood in which it is located. Using a rich data set with transaction prices extending over a period of 25 years, we consider the development of house prices in small geographical areas and relate them to the presence and size of investments in cultural heritage. Keywords: Cultural heritage, listed building, valuation methods, stated preference methods, hedonic prices, spatial statistics, fixed effect model, historic buildings JEL codes: C210; R200
    Date: 2012–10
  2. By: Eleni Gavra; Anastasia Bourlidou; Klairi Gkioufi
    Abstract: Turkey constitutes a country privileged with ekistics and cultural heritage of crucial interest that is linked to ancient civilizations. Over the past decades, the turkish government has been formatting and developing a protective institutional framework, concerning the preservation of its historical environment. However, the country has endured many political and economical alterations that have influenced the qualitative character of the monumental architecture, as well as the regional development of historical communities. Ôhis paper deals with the Greek’s cultural heritage in Turkey today, targeting on the enhancement of strategic solutions that concern the symbiosis of the dualism of greek origin ekistics heritage and tourism development in the turkish territories. The methodology approach is achieved through bibliography and in situ research and analysis that have taken place during a scientific research program concerning the Greek’s cultural presence in Asia Minor (17th- 20th centuries). In addition to that, a thorough examination is followed in the evaluation of the existing turkish and international institutional framework, regarding the protection of the Greek’s ekistics and monumental heritage in Turkey. In this context, a series of strategic measures is proposed in order to preserve and enhance the cultural value and aesthetics of the Greek’s heritage in Turkey today. The governmental administration and international legislation, the elimination of bureaucratic issues, the promotion of strategic planning on both urban and architectural level, as well as the encouragement of the interstate relations between Turkey and Greece, are some of the potential solutions highly underlined in this paper.
    Date: 2012–10
  3. By: Gabriel Ahlfeldt; Kristoffer Möller; Sevrin Waights; Nicolai Wendland
    Abstract: Assuming that owners are fully compensated for the costs and benefits through the prices they pay for properties, we investigate the effects conservation areas have on value in England in a spatial hedonic analysis of property prices. Controlling for a particularly rich set of property and location attributes as well as unobserved spatiotemporal heterogeneity, our conditional estimates indicate a premium of about 8.5% for otherwise comparable properties located inside a conservation area. We detect heritage externality effect, which accounts for up to 4% of the value of properties located just outside conservation areas and becomes statistically indistinguishable from zero after about 500m. Within conservation areas, moving into the centre where heritage density is highest increases the premium by up to 100% compared to a location at the edge the conservation area boundary. The results from a spatiotemporal analysis indicate that the premium attached to a location inside as well as near to a conservation areas has significantly increased over time, but that the formal act of designation does not exhibit a statistically significant impact on property prices inside a conservation area. Joint with a moderate, but significant and decline in relative prices just outside the boundaries, the pattern of results does not support the presence of a supply driven increase in prices.
    Date: 2012–10
  4. By: Federico Etro (Department of Economics, University Of Venice Cà Foscari); Laura Pagani (Department of Economics, University Of Milan, Bicocca)
    Abstract: We study the art market in the Venetian Republic from 1550 to 1750 analyzing the determinants of the prices (adjusted for the cost of living measured by the cost of wheat) of figurative paintings. Reputation of the painters, size of the paintings and other quantifiable factors affect prices as expected. Other relevant factors include the placement of the paintings (on the altar, on the ceiling or on the walls), whose impact reflects differences in demand elasticities. We find evidence evidence of the law of one price confirming price equalization between high and low demand destinations and between different subjects. Finally we relate the temporal trend of the price of a representative painting with waves of artistic innovations, whose picks were in the Mannerist and Rococò periods with a dark Baroque age in the intermediate period.
    Keywords: Economic theory of Art history, hedonic model, Law of one price
    JEL: Z11 N0 D4
    Date: 2012
  5. By: Eva Psatha; Alex Deffner
    Abstract: Defining quality of life (qol) at personal or societal level is a difficult process which largely depends on the selected determining factors. Among the various parameters having been proposed as qol determinants, leisure and culture issues have only recently found their place, as they had long been neglected. In the ¡developed¢ societies leisure time is acknowledged to be an integral part of a well-balanced management of personal time and a significant determinant for a person¢s well-being. The ¡right¢ to leisure is considered to be a measure for the societal quality, in the terms of personal freedom, participation in social life and creativity. A special dimension of the relationship connecting leisure, culture and qol which is also highlighted in the literature, concerns the ongoing development of consumption patterns regarding the ¡exploitation¢ of leisure options. The issue of leisure time acting as a qol determinant emerges mostly as a matter of quality rather than a matter of quantity. Thus, amplifying the ¡discretionary¢ time for all is not always sufficient for upgrading the collective qol. Cultural resources, leisure options and opportunities for improving of this type of time are needed. From this point of view, urban infrastructure concerning leisure activities and culture, constitute a significant determinant for the collective quality of life in a city. At the same time, cultural and leisure urban resources act as a powerful attraction for visitors, enhancing –or even driving- tourism development. Thereby, cultural and urban resources reinforce the tourist profile and competitiveness of cities. One could argue that this procedure also leads to an improvement of qol for citizens at a secondary level, but the relationship between tourism development and qoul is not always straightforward. Although tourism attraction acts as a driving force of a city¢s economic development, it has also been denounced as a carrier of several problems, including environmental degradation and social disturbance. Thus, while some cities pursue tourism development through the promotion of their cultural and leisure resources, others face with skepticism the effects of tourism in everyday urban life. Thus, the relationship between tourism, culture and leisure from the perspective of qoul is complex, and this paper aims at highlighting and analysing the issues arising from this relationship. Keywords: quality of urban life, tourism development, leisure, cultural resources JEL Classification Z10
    Date: 2012–10
  6. By: Helmut M. Dietl (Department of Business Administration (IBW), University of Zurich); Markus Lang (Department of Business Administration (IBW), University of Zurich); Pannlang Lin (Department of Business Administration (IBW), University of Zurich)
    Abstract: This paper develops a theoretical model of asymmetric competition between a pay TV and a free TV broadcaster. Our model shows that the pay TV broadcaster has incentives to place advertising on its channel if the marginal return on advertising exceeds the viewers' disutility from advertising. In this case, however, the pay TV advertising level is always below the corresponding level on free TV. The pay TV advertising level can increase with a higher viewer disutility from advertising but the pay TV channel will never attract a larger viewership than the free TV channel. Furthermore, we show that introducing advertising on pay TV induces a decrease of the subscription fees on this channel and a decrease in the advertising level of the free TV channel. Moreover, pay TV viewer demand can increase if the pay TV broadcaster places advertising on its channel. If the viewer disutility of advertising is suffciently large, aggregate broadcaster profits increase through the introduction of advertising in pay TV, while aggregate consumer surplus always increases.
    Keywords: Manufacturing network, Manufacturing plant, Global operations management, Lead factory, Knowledge transfer
    Date: 2012–01
  7. By: Emanuela Marrocu; Raffaele Paci
    Abstract: The aim of this paper is to assess the role played by creativity and other components of human capital on the process of economic growth for 257 regions in the 27 member countries of the European Union. We first decompose the regional human capital endowment to distinguish between the educational component (the share of individuals with a university degree) and the creativity component, which considers the actual occupations of individuals in specific jobs like science, engineering, education, arts and entertainment. We define three non overlapping categories of human capital (creative graduates, bohemians and non creative graduates) which are simultaneously included in a spatial model as determinants of regional growth measured by labour productivity. After extending the analysis to control for other relevant factors which may affect regional development, such as physical, technological and social capital, cultural diversity, industrial and geographical characteristics, we provide robust evidence on the growth enhancing effects of graduates, in particular for those of the creative category. Keywords: human capital, creativity, regional growth JEL code: C21, J24, O40, R11
    Date: 2012–10
  8. By: Dana Bajusova; Maria Spesova; Elena Zarska
    Abstract: Creativity is a new paradigm of development, which connects society in its economic, culture, technological and social aspects at the macro and micro level. Creativity, knowledge and access to information are central points of this paradigm and are considered to be engines of economic growth in globalizing world (UNCTAD, 2008). Creativity and creative economy is a new trend that is discussed among scientists but still more and more often also among politicians from international to local level. Creative economy defines and brings to the attention new categories such as creative industries and creative class. The economy with creative industries and creative class as people with creative talent are connected with the place as a creative place. Creative place is the most often specified by another category – creative city. Presence of creative industries and creative class within the structure of local (municipal) economics has an impact on competitiveness of the city. An ambition of each city is aimed at its increase. It is common that support and implementation of creativity, that are carried by creative industries and creative class, has become a part of enforcement approaches and strategies to bring the desired effect - the dynamics of city growth. The single approaches formulated into more or less comprehensive concepts have several common features – city is perceived as a space for creation of such an environment that can absorb and attract creative industries and creative class that are considered to be dynamising elements of urban development. Different concepts have their own characteristics and specific features as regards the ways of creating the creative environment and the importance or scale of creative activities and creative individuals within the structure of the economy. This paper focuses on different approaches, measures and instruments used or designed in order to support creativity at the local level. The local level cannot be examined without ties to higher levels of government. Key words: creative economy, creative class, local development, small and medium sized cities, policy support of creativity JEL code: H76, H81, R28
    Date: 2012–10
  9. By: Jörg Peters; Christoph Strupat; Colin Vance
    Abstract: In recent years, rural electrification and access to television have spread rapidly throughout the developing world. The values and cultural norms embodied in television programming have potentially profound implications for influencing behavior, particularly as regards reproductive decisions. Using household panel data from the Indonesian Family Life Survey (IFLS), this paper explores the effect of television ownership on the use of modern contraceptives in rural Indonesia. Although results from a pooled regression suggest a statistically significant and positive relationship between contraceptive use and television ownership, this finding is not robust to fixed effects estimates that control for time-invariant unobserved characteristics. By contrast, several other individual and community-level determinants, most notably the presence of midwives and health services, are statistically significant in the fixed effects model. We conclude that the growing corpus of cross-sectional evidence on a link between television and contraception should be interpreted cautiously.
    Keywords: Contraceptive use; television; fertility; technology adoption; rural development
    JEL: J13 O12 O33
    Date: 2012–09
  10. By: Zoltan Kettinger; David Emanuel Andersson
    Abstract: According to social scientists such as Richard Florida and Ronald Inglehart, the structural changes that accompany post-industrialization not only change the industrial and occupational structures of post-industrial regions. They also affect the value structure so that creativity, quality of life and tolerance are valued more than money and material possessions. According to economic theory, the subjective preferences of consumers should determine the willingness to pay for various goods. One of the most important goods that individuals consume is housing, and hence changes to the value structure should influence the willingness to pay for housing attributes to the extent that such attributes reflect relevant values. Using a hedonic approach, implicit prices are estimated for relevant neighborhood attributes in the Malmö metropolitan area in southern Sweden. The tested hypothesis is that “post-industrial preferences†imply a greater valuation of creative-class concentration, ethnic diversity, and aesthetic satisfaction as desired neighborhood attributes. Conversely, traditional neighborhood attributes such as mean income and the percentage of low-income immigrants should be less influential as price determinants in post-industrial “creative†cities. Using both log-linear and Box-Cox transformed functional forms, hedonic price functions are estimated for the greater Malmö region, which currently encompasses the western half of the province of Scania. Keywords: creative class, hedonic prices, postindustrialization, neighborhood attributes
    Date: 2012–10
  11. By: Ricard Gil (Carey Business School, Johns Hopkins University); Mitsukuni Nishida (Carey Business School, Johns Hopkins University)
    Abstract: Although we have many tools to understand the effect of regulation on competition, we know little about the importance of enforcement in explaining the impact of regulation. For this purpose, this paper uses data from Spanish local television industry in Spain from 1995 through 2001, which provide an unique opportunity for examining how competition changes with the introduction of regulation and a posterior liberalization. During this period, the television industry transitioned from a state of alegality (no regulation in place) to being highly regulated and finally to being deregulated. Using a firm entry model from Bresnahan and Reiss (1990, 1991), we estimate local TV station entry thresholds by number of entrants across years. We decompose the ratio into the fixed costs and variable profits, and find both an increase in the fixed-costs ratios and decrease in the variable-profit ratios drive the departure in the entry threshold from the one in other years. We find the model parameters are informative about the nature of the regulation and how strongly the government enforces the regulation.
    Keywords: Regulation, Competition, Television, Liberalization
    JEL: L51 L82
    Date: 2012–05

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