nep-cul New Economics Papers
on Cultural Economics
Issue of 2017‒11‒19
eight papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale

  1. The Competitive Market Value of Copyright in Music: A Digital Gordian Knot By Marcel Boyer
  2. Studying “Sponsored Goods” in Cultural Sector. Econometric Model of Baumol’s Disease By Рубинштейн Александр Яковлевич
  3. The Three-Legged Stool of Music Value: Hertzian Radio, SiriusXM, Spotify By Marcel Boyer
  4. Where Do People Get Their News? By Kennedy, Patrick; Prat, Andrea
  5. The Regulation of Public Service Broadcasters : Should there be more advertising on television? By Crawford, Gregory S.; Deer, Lachlan; Smith, Jeremy; Sturgeon, Paul
  6. Social value orientation and topography in urbanization: A case of Beijing, China By Zhang Jingchao; Koji Kotani; Tatsuyoshi Saijo
  7. An Analysis of Revenues at the Comédie française, 1680-1793 By Velde, Francois R.
  8. Potterian Economics By Daniel Levy; Avichai Snir

  1. By: Marcel Boyer
    Abstract: Pricing copyrighted works or assets so that creators are fairly compensated, while users can benefit from the digital economy given the information good character of such works has always been a difficult task. Doing it in the digital era is even more challenging. Striking that balance and determining the proper royalty level and the efficient rate base require that the competitive market value of such copyright in musical works and sound recordings be ascertained. I review some of the challenges and pitfalls in adequately framing the issues, and review an approach to infer the competitive market value of music in commercial terrestrial/Hertzian radio, satellite radio and interactive music streaming services from choices of operators in those industries. The resulting royalty formulas and payments are embedded into and discussed through the economics of public policy towards culture (the elephant in the room). An Appendix presents the main characteristics of music copyright structures in different jurisdictions.
    Keywords: Music copyrights,Intellectual property,
    Date: 2017–10–30
  2. By: Рубинштейн Александр Яковлевич
    Abstract: The paper presents the second part of the study of “sponsored goods” in the cultural sector. It describes economic activities of theaters, concert organizations and museums in three dimensional index space coordinate axes being the lag of labor productivity, faster growth of salaries and tickets prices in relation to the corresponding macroeconomic indices. The methodology of constructing such indexes and statistical data used for this purpose are described in the first article published under the title “Symptoms and consequences of Baumol's cost disease in cultural sector: an econometric study of “sponsored goods”. The aim of the present article is to construct and analyse econometric model of cost disease based on statistical data on activities of Russian theaters, concert organizations and museums for the period of 1994-2010. The regression analysis based on structural model that reflects theoretically predictable links was chosen as a method of study. Such links include first, influence on cost growth of lag of labour productivity in arts organisations and parallel trend in salaries. Second, dependence of increase of income of such organizations on dynamics of labour productivity and ticket prices, third, balanced equation - product of equilibrium conditions for sponsored goods that describes the interrelation between costs of production, prices and budget subsidies. The calculations made it possible to construct basic and modified econometric models that establish statistical correlations between income deficit and three regressors, namely indexes of labour productivity, salaries and ticket prices. As a result of this model the article presents projections of regression relation of income deficit on «expenditures plane», «income plane» and «economic results plane». Theequations derived allow to conclude that there is a statistically significant income deficit negative elasticity by labour productivity index, positive elasticity by salaries index and ticket price index, as well as rising dynamics of Russian performing arts organization income deficit and its compensation in the nearest future.
    Keywords: "sponsored goods", "cost disease", Baumol’s indexes, econometric models, income deficit
    JEL: C43 L38 Z1 Z11
  3. By: Marcel Boyer
    Abstract: Pricing copyrighted works or assets has always been a difficult task given the information good character of such works. Doing it in the digital era is even more challenging. This paper proposes an approach to infer the respective competitive market value of copyrights in music from choices made by operators of Hertzian radio, satellite radio (SiriusXM), and interactive music streaming services (Spotify). Although the inferred music values are rather similar, they need not be equal or even close as business models and cost structures differ significantly between those music delivery technologies. Nevertheless the results suggest that rightsholders are significantly shortchanged and poorly served by the current copyright pricing framework.
    Date: 2017–10–30
  4. By: Kennedy, Patrick; Prat, Andrea
    Abstract: The media industry is unique in its ability to spread information that may influence the democratic process. This influence depends on where and how citizens get their political information. While previous research has examined news production and consumption on specific media platforms --- such as newspapers, television, or the Internet --- little is known about overall news consumption across platforms. To fill this gap, we use a model of media power and individual-level survey data on news consumption to estimate the potential electoral influence of major news organizations in 18 countries. Our analysis highlights three global patterns: high levels of concentration in media power, dominant rankings by television companies, and a link between socioeconomic inequality and information inequality. We also explore international differences in the role of public-service broadcasting.
    Keywords: inequality; media concentration; media power
    Date: 2017–11
  5. By: Crawford, Gregory S. (University of Zurich and CEPR); Deer, Lachlan (University of Zurich); Smith, Jeremy (University of Warwick); Sturgeon, Paul (Mindshare, Group M)
    Abstract: Increased competition for viewers’ time is threatening the viability of publicservice broadcasters (PSBs) around the world. Changing regulations regarding advertising minutes might increase revenues, but little is known about the structure of advertising demand. To address this problem, we collect a unique dataset on monthly impacts (quantities) and prices of UK television channels between 2002 and 2009 to estimate the (inverse) demand for advertising on both public and commercial broadcasters. We find that increasing PSB advertising minutes to the level permitted for non-PSBs would increase PSB and industry revenue by 10.5% and 6.7%.
    JEL: D2 L1 L5 M3
    Date: 2017
  6. By: Zhang Jingchao (School of Economics and Management, Kochi University of Technology); Koji Kotani (School of Economics and Management, Kochi University of Technology); Tatsuyoshi Saijo (School of Economics and Management, Kochi University of Technology)
    Abstract: Urbanization leads to cultural changes that shape people's social values and behaviors. Topographical variation of mountainous, hilly and plains areas is considered one of the main factors to reflect different degrees of urbanization, following distance to urban cities. Therefore, it is hypothesized that there may be a topographical difference in distributions of social value orientations (SVOs) that categorize people's social preferences into the prosocial, the proself and the unidentified. To examine this hypothesis, we conduct field surveys and experiments in mountainous, hilly and plains areas of Beijing, collecting sociodemographic information and SVOs of 596 samples. We find that proportions of proself people are higher in plains and hilly areas than mountainous areas, as the distance to the center of Beijing becomes shorter. Also, a proportion of unidentified people is prominent in hilly areas as a transitional society. Overall, this result suggests that social preferences transition from the prosocial to the unidentified and then to the proself with the topographical changes, implying that new social mechanisms shall be necessary to affect people's social preferences for inducing prosocial behaviors in the progress of urbanization. Otherwise, important social problems such as air pollution or sustainability, which require further cooperation for the solutions, will pose more danger in the future.
    Keywords: Social value orientation, topography, urbanization
    Date: 2017–10
  7. By: Velde, Francois R. (Federal Reserve Bank of Chicago)
    Abstract: I study the business practices of the Comédie française, the main theater in Paris, between 1680 and 1793. The theater was an actors’ partnership and operated within a (contested) oligopoly. Newly available data provide revenues by price category for over 32,000 performances. Attendance varied considerably from one performance to the next. Total revenues increased in the second half of the 18th century as demand for entertainment in Paris boomed. The increase came in part from box rentals (by performance or by season). Pricing practices changed over time, as premium pricing for high-demand events made way for premium pricing on specific weekdays, and ultimately constant pricing. The repertory consisted of proven classics to which successful novelties were added. As demand grew, the theater provided more variety and more novelty.
    Keywords: Entertainment industry; history of theater; oligopoly; France; Paris; Comédie Française
    JEL: L82 N73 N83
    Date: 2017–11–10
  8. By: Daniel Levy (International School of Economics at Tbilisi State University; Department of Economics, Bar-Ilan University; Department of Economics, Emory University; Rimini Center for Economic Analysis, ITALY;); Avichai Snir (Department of Banking and Finance, Netanya Academic College, Netanya 42365, ISRAEL)
    Abstract: Recent studies in psychology and neuroscience find that fictional works exert strong influence on readers and shape their opinions and worldviews. We study the Potterian economy, which we compare to economic models, to assess how Harry Potter books affect economic literacy. We find that some principles of Potterian economics are consistent with economists’ models. Many others, however, are distorted and contain numerous inaccuracies, which contradict professional economists’ views and insights, and contribute to the general public’s biases, ignorance, and lack of understanding of economics.
    Keywords: Economic and Financial Literacy, Political Economy, Public Choice, Rent Seeking, Folk Economics, Harry Potter, Social Organization of Economic Activity, Literature, Fiction, Potterian Economy, Potterian Economics, Popular Opinion
    Date: 2017

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