Cost Structure and Product Mix of Local Public Theatres |
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| Authors: | Roberto Fazioli Massimo Filippini |
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| Institution: | (1) Institute of Economics and Finance, University of Ferrara, Via d'Este 44, 44100 Ferrara, Italy;(2) Institute for Empirical Research in Economics, University of Zurich, Blümlisalpstr. 10, 8006 Zurich, Switzerland |
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| 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.
This revised version was published online in August 2006 with corrections to the Cover Date. |
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| Keywords: | regulation and efficiency cultural economics cost function |
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