nep-cul New Economics Papers
on Cultural Economics
Issue of 2015‒01‒09
nine papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale “Amedeo Avogadro”

  1. The creative wealth of nations : how the performing arts can advance development and human progress By Kabanda, Patrick
  2. Determining the Value of Modern and Contemporary Furniture Design: an Exploratory Investigation. By Bertacchini, Enrico; Friel, Martha
  3. Digital piracy: an update By BELLEFLAMME, Paul; PEITZ, Martin
  4. What’s Going On? Digitization and Global Music Trade Patterns since 2006 By Estrella Gomez; Bertin Martens; Geomina Turlea
  5. The Arts and Cultural Production Satellite Account (ACPSA) By Paul V. Kern; David B. Wasshausen; Steven L. Zemanek
  6. Bubbles and Trading Frenzies : Evidence from the Art Market By Penasse, J.N.G.; Renneboog, L.D.R.
  7. Media Power By Prat, Andrea
  8. Culture Concentration By Stephen Sheppard
  9. Dead Poets’ Property - How Does Copyright Influence Price By Xing Li; Megan MacGarvie; Petra Moser

  1. By: Kabanda, Patrick
    Abstract: Cultural activities are increasingly noted as drivers of meaningful development. But they have yet to gain a prominent place in the architecture of development strategy. The performing arts, discussed here, exhibit direct effects on social progress and economic growth through trade in music, movies, andtemporary work permits for artists, for example. Indirect contributions may also include environmental stewardship, tourism, nation branding, social inclusion, cultural democracy, and shifting cultural behaviors. These direct and indirect contributions are not well documented. As such, how is the creative or cultural sector a crucial part of the wealth of nations, and how could the World Bank Group better leverage the performing arts in its development strategy? This discussion provides a broad snapshot, from arts education, to social inclusion, to international trade in services. Key constraints include: the paucity of data and the difficulty of measuring cultural activities, the challenge of intellectual property, and the unclear benefits of cultural tourism. Part I sets the stage. Part II then provides policy options to foster the performing arts as a promising engine for development. Suggestions include: 1. expanding direct involvement in artistic projects, 2. increasing the use of performing arts to address social issues, 3. collecting data, 4. promoting intellectual property training programs, 5. supporting digital platforms in the developing world that advance indigenous music, and 6. funding studies on such areas as cultural tourism. Progress still needs to be made in the discussion of the diverse ways that the performing arts can contribute to meaningful development.
    Keywords: Cultural Policy,Cultural Heritage&Preservation,Arts&Music,Economic Theory&Research,Curriculum&Instruction
    Date: 2014–11–01
  2. By: Bertacchini, Enrico; Friel, Martha (University of Turin)
    Abstract: The paper analyses the formation of pricess in the market of collectable furniture design. Given their aesthetic quality and symbolic significance modern and contemporary furniture design objects are increasingly exchanged in art auctions. However, reproducibility and other potential differences from traditional artworks set interesting challenges in studying auction price formation for this kind of goods. The paper documents the development of markets in modern and contemporary furniture design analysing how cultural and economic values interact in this emerging context and what are the distinctive features with respect to other traditional art markets. Moreover, using auction data for furniture design works by the most prominent designers of the XXth century, the determinants of price formation are analysed and discussed.
    Date: 2014–11
  3. By: BELLEFLAMME, Paul (Université catholique de Louvain, CORE and LSM, Belgium); PEITZ, Martin (University of Mannheim)
    Abstract: This note summarizes and updates our previous survey of the economics of digital piracy (Belleflamme and Peitz, 2012).
    Keywords: information good, piracy, copyright, IP protection, internet, peer-to-peer, software, music
    JEL: L11 L82 L86
    Date: 2014–06–11
  4. By: Estrella Gomez (European Commission – JRC - IPTS); Bertin Martens (European Commission – JRC - IPTS); Geomina Turlea (University of Minnesota)
    Abstract: The objective of this paper is to document the evolution of cross-border music trade patterns in this transition period and to explain what drives digital music trade patterns. The shift from analogue to digital music distribution has substantially reduced trade costs and has enlarged the choice sets of music consumers around the world. Using comprehensive data on digital track sales in the US, Canada, and 16 European countries, 2006-2011, we document patterns of music trade in the digital era and contrast it with what’s known from elsewhere about trade in popular music for the past half century. While home bias in music consumption among the top 100 songs had grown in the pre-digital distribution period prior to 2006, home bias has declined since then. We find that the share of imported songs in music consumption has grown in all countries except in the US. Moreover, although the number of European songs available has risen faster than the number of US songs, the market share of the US in digital music sales has increased while the market shares of European repertoires have fallen. US repertoire holds the largest market share in almost every country. Home bias is lower in the long tail than at the top end of the distribution. We consider four candidate explanations for the shift away from domestic music: a) that growth in availability of particular repertoires explains their growth in total sales and market shares, b) that changes in the effect of distance-related trade costs on trade made possible by digitization explain changed patterns of trade, c) that changed preferences toward particular origin repertoires explains changed patterns, and d) that recent vintages of particular repertoires have grown more appealing to world consumers. We conclude that a combination of c) and d) offers the most credible explanation for the observed patterns.
    Keywords: digital music, online trade, music downloads, trade in cultural products, gravity model, cultural diversity
    JEL: F15 O52
    Date: 2014–10
  5. By: Paul V. Kern; David B. Wasshausen; Steven L. Zemanek (Bureau of Economic Analysis)
    JEL: E60
    Date: 2014–07
  6. By: Penasse, J.N.G. (Tilburg University, Center For Economic Research); Renneboog, L.D.R. (Tilburg University, Center For Economic Research)
    Abstract: The art market is subject to frequent booms and busts in both prices and volume, which are difficult to reconcile with models where agents are rational and hold homogenous beliefs. This paper shows that (i) volume is mainly driven by speculative transactions; (ii) positive price-volume correlation is pervasive across art movements, and is larger for the most volatile segments of the art market; (iii) volume predicts negative long-term returns, a relation that is statistically and economically large. Overall, our evidence supports the bubble model of Scheinkman and Xiong (2003), which predicts that speculative trading can generate significant price bubbles, even if trading costs are huge and leverage is impossible.
    Keywords: art market; bubbles; return predictability; auction; trading volume
    JEL: G12 P34 Z11 D44
    Date: 2014
  7. By: Prat, Andrea
    Abstract: How much influence can news providers exert on the political process? This paper defines the power of a media organization as its ability to induce voters to make electoral decisions they would not make if reporting were unbiased. While existing media concentration measures are built by aggregating market shares across platforms, the new measure performs cross-platform aggregation at the level of individual voters on the basis of their attention shares. The paper derives a robust upper bound to media power over a range of assumptions on the beliefs and attention patterns of voters. Computing the value of the index for all major news sources in the United States from 2000 to 2012 results in four findings. First, it cannot be excluded that the three largest media conglomerates could individually swing the outcome of most presidential elections. Second, in all specifications the most powerful media organizations are broadcasters: the press and new media are always below. Third, relative media power is well approximated by a simple function of attention shares. Fourth, a calibrated version of the model indicates that media power is much lower than the upper bound but still substantial
    Keywords: media concentration; media plurality
    JEL: L82
    Date: 2014–08
  8. By: Stephen Sheppard (Williams College)
    Abstract: Many cities contain local agglomerations of cultural organizations. The “Museum Mile†portion of 5th Avenue in New York, the Museumplein in Amsterdam, Exhibition Road in South Kensington, London are famous examples, and there are hundreds of others large and small. These clusters may arise for some of the same reasons that other agglomerations occur, although the cultural organizations that comprise them have more complex objective functions than the proï¬t-maximizing ï¬rms whose agglomeration is more frequently studied. In this paper we assemble micro-geographic data on cultural non-proï¬ts in US urban areas from 1989 through 2009. We calculate several indices of concentration and dispersion, and assemble a panel data set to explore the impact of these concentrations on local economic well-being. We also present evidence consistent with a hypothesis that there are real agglomeration economies at work, lowering production costs and permitting a larger number of cultural organizations per capita in urban areas where the organizations are more clustered.
    JEL: R30 L30 Z18
    Date: 2014–01
  9. By: Xing Li (Stanford University); Megan MacGarvie (Boston University); Petra Moser (Stanford University)
    Abstract: This paper exploits a differential increase in copyright under the UK Copyright Act of 1814 - in favor of books by dead authors – to examine the influence of longer copyrights on price. Difference-in-differences analyses, which compare changes in the price of books by dead and living authors, indicate a substantial increase in price in response to an extension in copyright length. By comparison, placebo regressions for books by dead authors that did not benefit from the extension indicate no differential increase. Historical evidence suggests that longer copyrights increase price by improving publishers’ ability to practice intertemporal price discrimination.
    Keywords: Copyright, creativity, innovation, information goods, culture, intertemporal price discrimination.
    JEL: O3 K00 N33
    Date: 2014–09

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