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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

Suggested Citation

  • Roberto Fazioli & Massimo Filippini, 1997. "Cost Structure and Product Mix of Local Public Theatres," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 21(1), pages 77-86, March.
  • Handle: RePEc:kap:jculte:v:21:y:1997:i:1:p:77-86
    DOI: 10.1023/A:1007341613767
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    References listed on IDEAS

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    1. 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.
    2. 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.
    3. McElroy, Marjorie B, 1987. "Additive General Error Models for Production, Cost, and Derived Demand or Share Systems," Journal of Political Economy, University of Chicago Press, vol. 95(4), pages 737-757, August.
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    5. Frey, Bruno S., 1996. "Has Baumol's Cost Disease disappeared in the performing arts?," Ricerche Economiche, Elsevier, vol. 50(2), pages 173-182, June.
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    Cited by:

    1. Víctor Fernández-Blanco & Ana Rodríguez-Álvarez & Aleksandra Wiśniewska, 2019. "Measuring technical efficiency and marginal costs in the performing arts: the case of the municipal theatres of Warsaw," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 43(1), pages 97-119, March.
    2. Victor Fernandez-Blanco & Ana Rodriguez-Alvarez, 2015. "Measuring allocative efficiency in cultural economics: The case of Fundacion Princesa de Asturias," ACEI Working Paper Series AWP-09-2015, Association for Cultural Economics International, revised Oct 2015.
    3. Marta Zieba, 2011. "An Analysis of Technical Efficiency and Efficiency Factors for Austrian and Swiss Non-Profit Theatres," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 147(II), pages 233-274, June.
    4. Anne-Kathrin Last & Heike Wetzel, 2010. "The efficiency of German public theaters: a stochastic frontier analysis approach," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 34(2), pages 89-110, May.
    5. Castiglione, Concetta & Infante, Davide & Zieba, Marta, 2023. "Public support for performing arts. Efficiency and productivity gains in eleven European countries," Socio-Economic Planning Sciences, Elsevier, vol. 85(C).
    6. 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;The Association for Cultural Economics International, vol. 35(3), pages 185-201, August.
    7. Víctor Fernández-Blanco & Ana Rodríguez-Álvarez, 2018. "Measuring allocative efficiency in Cultural Economics: the case of “Fundación Princesa de Asturias” (The Princess of Asturias Foundation)," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 42(1), pages 91-110, February.
    8. Bruce Seaman, 2004. "Competition and the Non-Profit Arts: The Lost Industrial Organization Agenda," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 28(3), pages 167-193, August.
    9. Amy Whitaker, 2021. "Economies of scope in artists’ incubator projects," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 45(4), pages 613-631, December.
    10. Víctor Fernández-Blanco & Luis César Herrero & Juan Prieto-Rodríguez, 2013. "Performance of cultural heritage institutions," Chapters, in: Ilde Rizzo & Anna Mignosa (ed.), Handbook on the Economics of Cultural Heritage, chapter 24, pages i-i, Edward Elgar Publishing.
    11. Francisco Marco-Serrano, 2006. "Monitoring managerial efficiency in the performing arts: A regional theatres network perspective," Annals of Operations Research, Springer, vol. 145(1), pages 167-181, July.
    12. 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.
    13. Concetta Castiglione & Davide Infante & Marta Zieba, 2018. "Technical efficiency in the Italian performing arts companies," Small Business Economics, Springer, vol. 51(3), pages 609-638, October.

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