nep-cul New Economics Papers
on Cultural Economics
Issue of 2015‒01‒03
eight papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. The choice of migration destinations: cultural diversity versus cultural distance By Zhiling Wang; Thomas de Graaff; Peter Nijkamp
  2. Cultural diversity and entrepreneurship in England and Wales By Hardy, Daniel; Rodriguez-Pose, Andres
  3. Anchoring or Loss Aversion? Empirical Evidence from Art Auctions By Graddy, Kathryn; Loewenstein, Lara; Mei, Jianping; Moses, Mike; Pownall, Rachel A J
  4. Investment Returns and Economic Fundamentals in International Art Markets By Renneboog, L.D.R.; Spaenjers, C.
  5. Socio-cultural sphere: governance in new economy and impact on city branding By Vadim Pashkus; Natalia Pashkus; Anna Bulina
  7. Creative Class vs. Individual Creativity ? A Multi-level Approach to the Geography of Creativity By Christoph Alfken
  8. Asset prices and priceless assets By Penasse, J.N.G.

  1. By: Zhiling Wang; Thomas de Graaff; Peter Nijkamp
    Abstract: This study analyses the impact of cultural composition on regional attractiveness from the perspective of migrant sorting behaviour. We use an attitudinal survey to quantify cultural distances between natives and immigrants in the area concerned, and estimate the migrants¡¯ varying preferences for both cultural diversity and cultural distance. To account for regional unobserved heterogeneity, our econometric analysis employs artificial instrumental variables, as developed by Bayer et al. (2004a). The main conclusions are twofold. On the one hand, cultural diversity increases regional attractiveness. On the other hand, average cultural distance greatly weakens regional attractiveness, even when the presence of network effect is controlled for.
    Keywords: migration; cultural diversity; cultural distance; destination choice; sorting;
    JEL: R23 Z1
    Date: 2014–11
  2. By: Hardy, Daniel; Rodriguez-Pose, Andres
    Abstract: British regions are becoming increasingly culturally diverse, with migration as the main driver. Does this diversity benefit local economies? This research examines the impact of cultural diversity on the entrepreneurial performance of UK regions. We focus on two largely overlooked factors, the measurement of diversity, and the skills composition of diverse populations. First, more that demonstrating the importance of cultural diversity for entrepreneurship, we show that the type of cultural diversity measured is a decisive factor. Second, the skill composition of diverse populations is also key. Diversity amongst the ranks of the highly skilled exerts the strongest impact upon start-up intensities. The empirical investigation employs spatial regression techniques and carriers out several robustness checks, including instrumental variables specifications, to corroborate our findings.
    Keywords: cultural diversity; entrepreneurship; high-skilled migration; knowledge spillovers
    JEL: F22 J24 L26 M13
    Date: 2014–11
  3. By: Graddy, Kathryn; Loewenstein, Lara; Mei, Jianping; Moses, Mike; Pownall, Rachel A J
    Abstract: We find evidence for the behavioral biases of anchoring and loss aversion. We find that anchoring is more important for items that are resold quickly, and we find that the effect of loss aversion increases with the time that a painting is held. The evidence in favor of anchoring and loss aversion with this large dataset validates previous results and adds to the empirical evidence a finding of increasing loss aversion with the length a painting is held. We do not find evidence that investors can take advantage of these behavioral biases.
    Keywords: anchoring; art auctions; endowment effect; loss aversion
    JEL: D03 D44 Z11
    Date: 2014–06
  4. By: Renneboog, L.D.R. (Tilburg University, Center For Economic Research); Spaenjers, C. (Tilburg University, Center For Economic Research)
    Abstract: Abstract: Works of art are neither easily tradable across borders, nor evaluated according to globally identical standards. We examine geographical segmentation and its effects on price formation and returns in the international art auction market. We find (i) a close connection between the country of sale and the type (e.g., nationality) of artworks sold; (ii) substantial international variation in average returns to art investments over the period 1971-2007; (iii) an impact of both global and local GDP growth and equity returns on national art market returns. Local fundamentals have not lost importance over time, despite increased economic integration (especially between the EU countries). Yet, country-specific economic factors matter less in determining the auction outcomes for high-end art. Our findings suggest the continuing importance of international demand differences in shaping the global art market, at least outside the top segment.
    Keywords: Economics of art; art markets; home bias; geographical market segmentation; art auctions; hedonic regression
    JEL: Z11 G15
    Date: 2014
  5. By: Vadim Pashkus; Natalia Pashkus; Anna Bulina
    Abstract: The article analyzes the problems of socio-cultural sphere in the new economy, as well as the impact of socio-cultural sphere on the brand of St.Petersburg, paper also discusses possibility of evaluation of changes in brand strength due to socio-cultural impact. The proposed method of estimation of the strength of the brand is universal enough, but due to a pronounced specificity of various segments of the public sector it requires specifying when evaluating consumer interest in services for various types of organizations. In this paper, brand evaluation can not be based on the financial performance of organizations; we are not interested on the characteristics of brand equity, but on indicators of consumer preferences and the associated strength of the brand on the market. The proposed method can be adapted to different segments of the public sector (and their impact on brand site) that require adaptation indicators of demand and availability of the services of these organizations. It requires considering not only the classical estimation of the brand, calculated using the method of BCG (including adaptation of its indicators for socio-cultural sphere), and together with the emotional evaluation of brand strength by Keller used to calculate the integral market power of the brand. Priority of emotional components is defined by specific traits of Russian market in general and the cultural market, in particular. The competitiveness of the regional institutions of socio-cultural sector and the strength of their brand directly affects the competitiveness of the region as such. The paper raises questions of so called "star" status and orientation on brands in risk conditions. Brand allows city to start the process of urban regeneration, become the basis of its development strategy, and to revive the use of vacant spaces as well. Branded cities attract not only tourists but also entrepreneurs in various industries, people who want to live interesting, in an unique location and have access to the benefits of modern goods, unique heritage, objects and experiences. Brand adds a certain 'flavour' to the city. It can be promoted; it can attract the most qualified workers not only with competitive salary and benefit packages, but with a good place for work and for pleasures as well.
    Keywords: Socio-cultural sphere; new economy; cultural institutions; brand of St. Petersburg; strength of the brand (by Keller)brand of the territory; Y & R method
    JEL: L3 R11 Z1
    Date: 2014–11
  6. By: Beba Rakić, Mira Rakić (Megatrend University Belgrade, Faculty of Business Studies, Belgrade)
    Abstract: In the information century, the behavior of organizations in the business market is changing. Organizations as buyers have much more power at the business market. Organizations as sellers respond with the creation and free sharing of content that is important for potential and actual customers. Organizations apply digital marketing content to support the implementation of multiple business objectives, such as brand awareness, attraction of customers, creating the leads, maintaining of customer relationships/loyalty etc. The key forms of content are: articles, texts on social media (network, blogs, etc.), e-newsletter, case studies, events, videos etc. A particular challenge is the continuous creation and promotion of sufficient quality content for potential and current organizations as buyers.
    Keywords: Digital content, content marketing, business-to-business marketing (B2B), types of content, demand generation.
    JEL: M30
    Date: 2014–04
  7. By: Christoph Alfken
    Abstract: For more than ten years the topics creative class, creative industries and creative regions are on the agenda in economic geography literature. Contributions mainly focus on the distribution, mobility and economic impact of creative individuals or companies from a regional perspective. It is believed that the spatial concentration of creative individuals lead to positive regional economic effects and those creative individuals agglomerated in urban and amenity-rich regions characterised by a climate of tolerance. Above all, it is the work of Florida, who gives attention to creative individuals. His quantitative occupational approach can be seen as the prototype and dominant approach, which was adopted in a wide range of other studies. More recently, there is a growing body of literature empirically testing Florida's hypotheses for regions outside the U.S. However, previous empirical studies relied on occupation or industry based definitions as a proxy to identify creative individuals and aggregated regional numbers (e.g. share of creative class). Thus, results are potentially distorted. Instead of observing creative individual's behaviour there are occupation or industry specific characteristics in a region that might correlate with a concentration of these individuals. Moreover, using aggregated data bears the risk of ecological fallacy. Hitherto, economic geographers seem to have ignored insides from other disciplines studying creativity. In psychology it is not a dichotomy of creative and non-creative individuals, instead it is acknowledged that creativity is a matter of degree. The five-factor model ? or big five model ? is a well-recognized concept from psychology to describe an individual's personality based on five basic dimensions: extraversion, agreeableness, conscientiousness, neuroticism, and openness to experience. The dimension openness captures creative, innovative and artistic performance and interest of an individual. Hence, it should be a more direct measure to identify creative individuals than the approximation by occupations. Thus, the article builds upon insights from psychology and the data of the German Socio-Economic Panel to directly identify creative individuals based on their personality traits. Applying multilevel regression analysis, hypotheses derived from the creative class literature are tested comparing creative individuals with the rest of the workforce. The analysis controls for the individual and industry level to isolate the influence of regional characteristics. The empirical results show some evidence for Florida's hypotheses. Individual characteristics turn out to be the most significant differences, followed by characteristics at the industry level. Regional factors are less important, but urbanity and the share of bohemians are significant predictors. However, the location of creative class can be explained more precisely by their level of human capital and the location of the industries they are working in.
    Keywords: creative class; creativity; big five; personality traits; occupation; social psychology; economic geography
    JEL: O31 O18 R12
    Date: 2014–11
  8. By: Penasse, J.N.G. (Tilburg University, School of Economics and Management)
    Abstract: The doctoral thesis studies several aspects of asset returns dynamics. The first three chapters focus on returns in the fine art market. The first chapter provides evidence for the existence of a slow-moving fad component in art prices that induces short-term return predictability. The article has been published in Economics Letters (Volume 122, Issue 3, pp. 432-434), and was written together with Christophe Spaenjers and Luc Renneboog. Chapter 2 investigates how fast is information incorporated into aggregate art prices. Chapter 3 studies price-volume dynamics in the art market and documents evidence of bubble patterns in prices and is written with Luc Renneboog. Chapter 4 proposes a Bayesian estimation procedure that makes efficient use of cross-sectional information, and revisits the return predictability literature.
    Date: 2014

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