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Additional Concerns About O'Brien and Lane's Article on Film Incentive Programs

Author

Listed:
  • Bruce M. Bird
  • Hilde Patron
  • William J. Smith

Abstract

In this note, we follow up on the 2020 exchange in this journal between John Charles Bradbury and the replying authors Nina F. O’Brien, and Christianne J. Lane. We focus on some inconsistencies in O’Brien and Lane’s work, particularly regarding a critical maximum value in their dataset, the significance of which is reinforced by some publicly available data that is new to this discussion. In examining the economic impact of film incentive programs, O’Brien and Lane use the independent variable Incentives(millions) to measure “the allocation a state’s legislature earmarks for a programme.” However, some states’ programs have uncapped incentives; for these states, O’Brien and Lane proceed to estimate the ‘size’ of these ‘allocations’ on the basis of the highest allocation in any state with capped incentives. The result is an independent variable that is a mix of actual allocations for states with legislatively capped allocations and estimated allocations for states without legislatively capped allocations. Here we find that the aforementioned maximum value of Incentives(millions) is likely inaccurate, and that the total value of allocations estimated by O’Brien and Lane on the basis of that value likely greatly exceeds the value of actual allocations, casting their results in further doubt. Perhaps some of that doubt could be mitigated by the public release of their dataset, were that to occur.

Suggested Citation

  • Bruce M. Bird & Hilde Patron & William J. Smith, 2022. "Additional Concerns About O'Brien and Lane's Article on Film Incentive Programs," Econ Journal Watch, Econ Journal Watch, vol. 19(2), pages 232–241-2, September.
    • Handle: RePEc:ejw:journl:v:19:y:2022:i:2:p:232-241
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    References listed on IDEAS

    as
    1. Nina F. O'Brien & Christianne J. Lane, 2020. "Reply to Bradbury: Effects of Economic Incentives in the American Film Industry," Econ Journal Watch, Econ Journal Watch, vol. 17(1), pages 1-66–70, March.
    2. Pagan, Adrian, 1984. "Econometric Issues in the Analysis of Regressions with Generated Regressors," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 25(1), pages 221-247, February.
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    More about this item

    Keywords

    Film incentives; statistical bias; economic development; tax policy;
    All these keywords.

    JEL classification:

    • H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
    • H71 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Taxation, Subsidies, and Revenue
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R38 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Government Policy
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy

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