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At the origins of increased productivity growth in services. Productivity, social savings and the consumer surplus of the film industry, 1900-1938

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  • Bakker, Gerben

Abstract

This paper estimates and compares the benefits cinema technology generated to society in Britain, France and the US between 1900 and 1938. It is shown how cinema industrialised live entertainment, by standardisation, automation and making it tradable. The economic impact is measured in three ways: TFP-growth, social savings in 1938 and the consumer surplus enjoyed in 1938. Preliminary findings suggest that the entertainment industry accounted for 1.5 to 1.7 percent of national TFP-growth and for 0.9 to 1.6 percent of real GDP-growth in the three countries. Social savings were highest in the US (c. 2.5 billion dollars and three million workers) and relatively modest in Britain and France, possibly because of the relative abundance of skilled live-entertainment workers. Comparative social savings at entertainment PPP-ratios inflate British social savings to above the US level. Converging exchange rates and PPP price ratios suggest rapid international market integration. The paper’s methodology and findings may give insight in technological change in other service industries that were also industrialised.

Suggested Citation

  • Bakker, Gerben, 2004. "At the origins of increased productivity growth in services. Productivity, social savings and the consumer surplus of the film industry, 1900-1938," Economic History Working Papers 22348, London School of Economics and Political Science, Department of Economic History.
    • Handle: RePEc:ehl:wpaper:22348
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    File URL: http://eprints.lse.ac.uk/22348/
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    Cited by:

    1. Gerben Bakker, 2011. "Leisure Time, Cinema and the Structure of Household Entertainment Expenditure, 1890–1940," Chapters, in: Samuel Cameron (ed.), Handbook on the Economics of Leisure, chapter 16, Edward Elgar Publishing.
    2. Gerben Bakker, 2007. "The Evolution of Entertainment Consumption and the Emergence of Cinema, 1890–1940," Advances in Austrian Economics, in: The Evolution of Consumption: Theories and Practices, pages 93-137, Emerald Group Publishing Limited.
    3. Gerben Bakker, 2005. "The decline and fall of the European film industry: sunk costs, market size, and market structure, 1890–1927," Economic History Review, Economic History Society, vol. 58(2), pages 310-351, May.
    4. Bakker, Gerben, 2007. "Structural change and the growth contribution of services: how motion pictures industrialized US spectator entertainment," Economic History Working Papers 22314, London School of Economics and Political Science, Department of Economic History.

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    More about this item

    JEL classification:

    • N0 - Economic History - - General
    • O52 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Europe
    • F3 - International Economics - - International Finance
    • G3 - Financial Economics - - Corporate Finance and Governance
    • B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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