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

Víctor Fernández-Blanco (), Ana Rodriguez-Alvarez and Aleksandra Wiśniewska

No AWP-09-2017, ACEI Working Paper Series from Association for Cultural Economics International

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.

Keywords: theatres; multi-output technology; marginal cost; duality theory; input distance function (search for similar items in EconPapers)
JEL-codes: D24 L82 Z10 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2017-10, Revised 2017-10
New Economics Papers: this item is included in nep-cul and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Journal Article: Measuring technical efficiency and marginal costs in the performing arts: the case of the municipal theatres of Warsaw (2019)
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