nep-cul New Economics Papers
on Cultural Economics
Issue of 2013‒04‒13
seven papers chosen by
Roberto Zanola
University Amedeo Avogadro

  1. Music Piracy: Bad for Record Sales but Good for the iPod? By Leung, Tin Cheuk
  2. Why Mass Media Matter to Planning Research: The Case of Megaprojects By Bent Flyvbjerg
  3. The Economic Incentives of Cultural Transmission: Spatial Evidence from Naming Patterns across France By Algan, Yann; Mayer, Thierry; Thoenig, Mathias
  4. Culture, Languages, and Economics By Ginsburgh, Victor; Weber, Shlomo
  5. Genetic Diversity and the Origins of Cultural Fragmentation By Ashraf, Quamrul; Galor, Oded
  6. Does Culture Affect Local Productivity and Urban Amenities? By Brahim Boualam
  7. Do Institutions and Culture Matter for Business Cycles? By Altug, Sumru G.; Canova, Fabio

  1. By: Leung, Tin Cheuk
    Abstract: Music piracy is a double-edged sword for the music industry. On the one hand, it hurts record sales. On the other hand, it increases sales of its complements. To quantify the effect of music piracy, I construct a unique survey data set and use a Bayesian method to estimate the demand for music and iPods, and find three things. First, music piracy decreases music sales by 24% to 42%. Second, music piracy contributes 12% to iPod sales. Finally, counterfactual experiments show that Apple's revenue could increase by $36 per student if music were free.
    Keywords: demand estimation, iPod, music piracy
    JEL: K42 L14 L82 O34
    Date: 2012
  2. By: Bent Flyvbjerg
    Abstract: This article asks how planning scholarship may effectively gain impact in planning practice through media exposure. In liberal democracies the public sphere is dominated by mass media. Therefore, working with such media is a prerequisite for effective public impact of planning research. Using the example of megaproject planning, it is illustrated how so-called "phronetic planning research," which explicitly incorporates in its methodology active and strategic collaboration with media, may be helpful in generating change in planning practice via the public sphere. Main lessons learned are: (1) Working with mass media is an extremely cost-effective way to increase the impact of planning scholarship on practice; (2) Recent developments in information technology and social media have made impact via mass media even more effective; (3) Research on "tension points," i.e., points of potential conflict, are particularly interesting to media and the public, and are especially likely to generate change in practice; and (4) Tension points bite back; planning researchers should be prepared for, but not afraid of, this.
    Date: 2013–04
  3. By: Algan, Yann; Mayer, Thierry; Thoenig, Mathias
    Abstract: This paper aims at studying how economic incentives influence cultural transmission. We do so in the context of naming decisions, a crucial expression of cultural identity. Our focus is on Arabic versus Non-Arabic names given by parents to their newborn babies in France over the 2003-2007 period. Our model of cultural transmission disentangles between three determinants: (i) vertical transmission of parental culture; (ii) horizontal influence from the neighborhood; (iii) economic penalty associated with names that sound culturally distinctive. Our identification is based on the sample of households being exogenously allocated across public housings dwellings. We find that economic incentives largely influence naming choices: In the absence of economic penalty, the annual number of babies born with an Arabic name would have been more than 50 percent larger. Our theory-based estimates allow us to perform a welfare analysis where we gauge the strength of cultural attachment in monetary units. We find that the vertical transmission of an Arabic name provides the same shift in parents' utility as a 3\% rise in lifetime income of the child.
    Keywords: Culture; Social Interaction
    JEL: D19 Z10
    Date: 2013–04
  4. By: Ginsburgh, Victor; Weber, Shlomo
    Abstract: The impact of various facets of cultural diversity on economic outcomes has become a topic of intensive research in economics. This paper focuses on linguistic diversity as one of the important aspects of cultural heterogeneity, and more specifically, The aim of this paper is to formally examine two opposing forces, standardization and efficiency on the one hand, and cultural attachment and linguistic disenfranchisement, on the other, and to outline ways of bringing them to balance each other. In our measurement of disenfranchisement and fractionalization we heavily rely on the notion of linguistic distances or proximity between various linguistic groups. We also analyze the impact of linguistic diversity on trade, migration and markets for translation. We conclude by examining the issue of disenfranchisement in the European Union and possible standardization policies to address this issue.
    Keywords: culture; economic impact; ethnolinguistic fractionalization; linguistic disenfranchisement; measurement of diversity; standardization policies
    JEL: D63 H77
    Date: 2013–02
  5. By: Ashraf, Quamrul; Galor, Oded
    Abstract: Despite the importance attributed to the e¤ects of diversity on the stability and prosperity of nations, the origins of the uneven distribution of ethnic and cultural fragmentation across countries have been underexplored. Building on the role of deeply-rooted biogeographical forces in comparative development, this research empirically demonstrates that genetic diversity, predominantly determined during the prehistoric “out of Africa” migration of humans, is an underlying cause of various existing manifestations of ethnolinguistic heterogeneity. Further exploration of this uncharted territory may revolutionize the understanding of the e¤ects of deeply-rooted factors on economic development and the composition of human capital across the globe.
    Keywords: Cultural Diversity; Fractionalization; Genetic Diversity
    JEL: N30 O10 O30 O50 Z10
    Date: 2013–01
  6. By: Brahim Boualam
    Abstract: Does a better cultural milieu make a city more livable for residents and improve its business environment for firms? To address this question, I compute a measure of cultural specialization based on detailed occupational data for 362 U.S. metropolitan areas. I then estimate hedonic wage and rent equations and ask if differences in the cultural environment across cities capitalize into housing price and wage differentials. Simple correlations replicate standard results from the literature: cities that are more specialized in cultural and artistic occupations enjoy higher factor prices. Using time-series data, controlling for observable and unobservable city characteristics and implementing alternative specifications strongly alter this result. Even though the arts and culture might be appealing for some people and firms, such determinants are not strong enough to affect factor prices at the metropolitan level.
    Keywords: Urban economics, location choice, local amenities, culture.
    Date: 2013–03
  7. By: Altug, Sumru G.; Canova, Fabio
    Abstract: We examine the relationship between macroeconomic, institutional, and cultural indicators and cyclical fluctuations for European, Middle Eastern and North African Mediterranean countries. Mediterranean cycles are different from EU cycles: the duration of expansions is shorter; the amplitude and the output costs of recessions are larger; and cyclical synchronization is smaller. Differences in macroeconomic and institutional indicators partly account for the relative differences in cyclical synchronization. By contrast, differences in cultural indicators account for relative differences in the persistence, the volatility and the synchronization of cyclical fluctuations. Theoretical and policy implications are discussed.
    Keywords: Business cycles; institutions and culture; Mediterranean countries; synchronization.
    JEL: C32 E32
    Date: 2013–03

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