nep-cul New Economics Papers
on Cultural Economics
Issue of 2022‒10‒17
four papers chosen by
Roberto Zanola
Università degli Studi del Piemonte Orientale

  2. Culture and the creative economy in Glasgow city region, Scotland, United Kingdom By OECD
  3. From Gurus to Geeks? The Role of Customer and Expert Ratings in a Hedonic Analysis of French Red Wine Prices By Stephen BAZEN; Jean-Marie CARDEBAT; Magalie DUBOIS
  4. Valuation of Music Catalogs By Sasha Stoikov; Ivan Kosyuk

  1. By: Concetta Castiglione (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy)); Davide Infante (Department of Economics, Statistics and Finance 'Giovanni Anania', University of Calabria, Rende (Italy)); Marta Zieba (Department of Economics, University of Limerick, Ireland)
    Abstract: This paper investigates the importance of public cultural expenditure for the efficiency and productivity of the performing arts (PA) firms. To this aim, we estimate a translog production function using the stochastic frontier approach (SFA), and we obtain the estimates of both technical efficiency and its determinants for the PA firms in EU-11 countries over the period 2009-2017. The large panel data set enables the application of robust true random-effects SFA techniques, which control for noise, unobserved firms’ heterogeneity and endogeneity of the inputs. Moreover, by estimating a production function, the characteristics of the production technology in the PA sector is also derived. The empirical results demonstrate that PA firms are technically inefficient, implying that the investigated firms could increase their artistic output between 32 and 42 percent and that decreasing returns to scale are prevalent, due to the presence of too many micro and large-scale firms in the European PA sectors. In contrast to the seminal Baumol and Bowen’s (1965) paper, we also demonstrate that the total factor productivity (TFP) increased in the EU PA firms over the examined period. Technical efficiency, although relatively low, was the main driver of this productivity growth, as opposed to scale efficiency or technological changes which display very small or no increases. We also find that, contrary to the common wisdom on its negative effects on firm efficiency, public spending on culture increases the efficiency of PA firms. Within this context some policy implications are discussed.
    Keywords: Cultural public expenditure, SFA production function, performing arts, technical efficiency, TFP change
    JEL: D24 L82 L88 O52 Z10 Z18
    Date: 2022–10
  2. By: OECD
    Abstract: Cultural and creative sectors are a significant driver of local development through job creation and income generation, spurring innovation across the economy. Beyond their economic impacts, they also have significant social impacts, from supporting health and well-being to promoting social inclusion and local social capital. Glasgow City Region in Scotland, United Kingdom has a long history of transformative cultural policy. Cultural and creative sectors are now one of the region’s strengths. This paper provides an overview of cultural and creative sectors in the Glasgow City Region, highlighting trends in employment, business dynamics, entrepreneurship and financing as well as cultural participation. It offers analysis and recommendations to support the region in continuing to build on its local cultural and creative ecosystem.
    Keywords: creative industries, cultural employment, culture and local development
    JEL: I31 Z1
    Date: 2022–10–05
  3. By: Stephen BAZEN; Jean-Marie CARDEBAT; Magalie DUBOIS
    Abstract: Wine is an experience good whose true quality can only be known by consuming it. This characteristic provides a rationale for recourse to experts who provide information on wine quality and reduce the information asymmetry for the consumer. Consumers may come to rely more on the comments and ratings of other consumers or peers, rather than those of experts (guides, specialized journals, personalities). This tendency has been observed in the hospitality (restaurants, hotels) and cultural (movies, novels) markets where popular applications exist and allow information to be collected from peers. We hypothesize that consumers’ ratings will come to dominate expert ratings in the wine expertise market. We use the ratings posted by consumers on the Vivino online marketplace for 37,960 French red wines. We employ a hedonic regression framework which includes the usual attributes of the wines as well as the ratings from both recognized experts and those of consumers on the Vivino platform. Average consumer ratings are found to have a larger effect on price than expert scores. These results are found to be robust to outliers and the general conclusion that peers matter more than experts holds when we exclude the top-end wines.
    Keywords: Hedonic analysis, Wine experts, Peer rating, Wine prices, Quality evaluation
    JEL: Q11 E71 D12 C01
    Date: 2022
  4. By: Sasha Stoikov; Ivan Kosyuk
    Abstract: We propose a risk neutral approach to forecast the cashflows of music catalogs, based on historical revenue data. We use a discounted cashflows formula to produce reasonable ranges of multipliers for these assets, based on the age of the catalog, the last-twelve-months revenue and the duration of the contract. We compare the multipliers implied by the cashflows of top, median and bottom performing songs on the Royalty Exchange platform. We find that ask prices are close to the multipliers justified by median song cashflows. The best bids are near the multipliers justified by the bottom decile of song cashflows.
    Date: 2022–09

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