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Publicly funded cultural institutions. A comparative economic valuation study

Author

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  • Aleksandra Wisniewska

    () (Department of Economics, University of Warsaw, Poland)

  • Mikolaj Czajkowski

    () (Department of Economics, University of Warsaw, Poland)

  • Wiktor Budzinski

    () (Department of Economics, University of Warsaw, Poland)

Abstract

Cultural institutions are the main creators of cultural goods and services and are responsible for their accessibility; cultural institutions are also the main beneficiaries of public funds for culture. The aim of this study is to evaluate the division of public resources into different branches of culture that are rooted in political ‘adhocism’ and historical dependencies. Based on the observed visitations and their costs, a two-stage budgeting model is employed to investigate the change in consumer surplus related to the loss of access to the markets of cinemas, museums, and theatres in Warsaw, the capital city of Poland. The institutions vary in terms of public good characteristics and importance as public bodies, expressed in terms of subsidies. The inclusion of the entire markets of institutions helps to overcome the embedding effect, which affects many single-site valuations. It also enables a comparison between cultural sectors, which is rare in cultural economics. We find that people assign a positive value to the accessibility of all institutions and groups of institutions. However, the estimated value generated by each type of cultural institution is not aligned with the division of subsidies between these markets. For theatres, the total benefits exceed public support. Museums are found to deliver a lower level of benefits to society; the value they generate is outweighed by the subsidies they receive. Cinemas receive little direct support; however, they are valued twice as much as museums. The problem of cultural policy lies in the division of resources, which is much more equal relative to benefits attributed to groups of museums and theatres. At the same time the division between single institutions within all three branches of culture is unequal, with the significant exclusion of non-public institutions.

Suggested Citation

  • Aleksandra Wisniewska & Mikolaj Czajkowski & Wiktor Budzinski, 2019. "Publicly funded cultural institutions. A comparative economic valuation study," ACEI Working Paper Series AWP-04-2019, Association for Cultural Economics International, revised Apr 2019.
  • Handle: RePEc:cue:wpaper:awp-04-2019
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    File URL: http://www.culturaleconomics.org/awp/AWP-04-2019.pdf
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    1. repec:kap:enreec:v:74:y:2019:i:3:d:10.1007_s10640-019-00355-6 is not listed on IDEAS
    2. Mikołaj Czajkowski & Marek Giergiczny & Jakub Kronenberg & Jeffrey Englin, 2019. "The Individual Travel Cost Method with Consumer-Specific Values of Travel Time Savings," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 961-984, November.

    More about this item

    Keywords

    cultural policy; funding the arts; theatre; museum; cinema; non-market valuation;

    JEL classification:

    • Z1 - Other Special Topics - - Cultural Economics
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature
    • Z18 - Other Special Topics - - Cultural Economics - - - Public Policy
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis

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