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Measuring Technical Efficiency and Marginal Costs in the Performing Arts: The Case of the Municipal Theatres of Warsaw

Author

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  • Victor Fernandez-Blanco

    (Department of Economics, University of Oviedo, Spain)

  • Ana Rodriguez-Alvarez

    (Department of Economics, University of Oviedo, Spain)

  • Aleksandra Wisniewska

    (Department of Economics, University of Warsaw, Poland)

Abstract

The aim of this paper is to bring new contributions to the analysis of efficiency and productivity in the performing arts. First, we consider that the behavior of a performing arts company can be analyzed under a multi-output technology of production, since they offer different products in terms of quantity and quality. Second, and for the first time to the best of our knowledge, we propose a procedure to measure the marginal costs associated with the production of performing arts firms. To achieve our goals, we estimate a stochastic input distance function to a set of nineteen public municipal theatres in Warsaw during the period 2000-2012. Additionally, we calculate the technical efficiency indices for these theatres and characterize some determinants of their efficiency, paying special attention to the effect of public grants. Our findings suggest that those municipal theatres in Warsaw could have used 7% less inputs to achieve the same level of outputs. At the same time, the presence of public grants improves efficiency and, so, contributes to extend novelty and diversity. The marginal cost of a new performance is around 7,149 PLN; and introducing a new title costs up to 3.33 times more than staging one title already established in the repertoire.

Suggested Citation

  • Victor Fernandez-Blanco & Ana Rodriguez-Alvarez & Aleksandra Wisniewska, 2017. "Measuring Technical Efficiency and Marginal Costs in the Performing Arts: The Case of the Municipal Theatres of Warsaw," ACEI Working Paper Series AWP-09-2017, Association for Cultural Economics International, revised Oct 2017.
    • Handle: RePEc:cue:wpaper:awp-09-2017
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    Cited by:

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    3. Maria Jose Del Barrio-Tellado & Luis Cesar Herrero-Prieto, 2018. "Supporting the Dance Sector. Does Efficiency Clash with Success When Programming?," ACEI Working Paper Series AWP-03-2018, Association for Cultural Economics International, revised Jul 2018.
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    More about this item

    Keywords

    theatres; multi-output technology; marginal cost; duality theory; input distance function;
    All these keywords.

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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