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Cost Structure and Product Mix of Local Public Theatres

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  • Roberto Fazioli
  • Massimo Filippini

Abstract

The purpose of this study is to analyse the cost structure of the Italian local public theatres in order to assess economies of scale and scope and the desirability of the reform of the subsidy system. A translog multiproduct cost function was estimated using panel data for a sample of 28 theatres over the period 1991–1993. The results indicate the existence of scale and scope economies for most output levels. In addition, the estimated marginal costs for the two outputs indicate that, ceteris paribus, an additional performance conducted inside or outside the theatre by the resident theatre group is generally more expensive than an additional performance conducted inside the theatre by external theatre groups. These results call for a reform of the public subsidy system which do not promote the proliferation, but the interchange and the diffusion of a limited number of high quality shows. Copyright Kluwer Academic Publishers 1997

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File URL: http://hdl.handle.net/10.1023/A:1007341613767
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Bibliographic Info

Article provided by Springer in its journal Journal of Cultural Economics.

Volume (Year): 21 (1997)
Issue (Month): 1 (March)
Pages: 77-86

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Handle: RePEc:kap:jculte:v:21:y:1997:i:1:p:77-86

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Web page: http://www.springerlink.com/link.asp?id=100284

Related research

Keywords: regulation and efficiency; cultural economics; cost function;

References

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  1. Filippini, Massimo & Maggi, Rico, 1993. "Efficiency and Regulation in the Case of the Swiss Private Railways," Journal of Regulatory Economics, Springer, vol. 5(2), pages 199-216, June.
  2. Nelson, Randy A, 1989. "On the Measurement of Capacity Utilization," Journal of Industrial Economics, Wiley Blackwell, vol. 37(3), pages 273-86, March.
  3. Throsby, David, 1994. "The Production and Consumption of the Arts: A View of Cultural Economics," Journal of Economic Literature, American Economic Association, vol. 32(1), pages 1-29, March.
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Cited by:
  1. Anne-Kathrin Last & Heike Wetzel, 2011. "Baumol’s cost disease, efficiency, and productivity in the performing arts: an analysis of german public theaters," Journal of Cultural Economics, Springer, vol. 35(3), pages 185-201, August.
  2. Anne-Kathrin Last & Heike Wetzel, 2009. "The Efficiency of German Public Theaters: A Stochastic Frontier Analysis Approach," Working Paper Series in Economics 134, University of Lüneburg, Institute of Economics.
  3. Luis César Herrero-Prieto, 2013. "Is Museum Performance Affected By Location And Institution Type? Measuring Cultural Institution Efficiency Through Non-Parametric Techniques," The Institute for International Integration Studies Discussion Paper Series iiisdp425, IIIS.
  4. Bruce Seaman, 2004. "Competition and the Non-Profit Arts: The Lost Industrial Organization Agenda," Journal of Cultural Economics, Springer, vol. 28(3), pages 167-193, August.

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