A0313
Title: Efficiency of Italian opera houses: A stochastic frontier production function approach
Authors: Sabrina Auci - University of Palermo (Italy) [presenting]
Antonio Cognata - University of Palermo (Italy)
Abstract: The empirical literature on the production of performing arts has mainly focused on cost functions. Studies have explored the cost structure of symphony orchestras, theatres and museums, mostly with the aim of finding evidence of scale economies. Until now no work has studied opera houses production or cost functions. Only recently there have been attempts in the use of a more suitable methodology and in finding evidence of the efficiency of performing arts institutions. The aim is to investigate efficiency of Italian opera houses using a stochastic frontier approach (SFA). The empirical analysis based on the concept of output maximization is performed on firm level unique database of 14 major Italian opera houses in the period 2001-2012. Dividing the error component into two aspects - the systematic and the noise components - the SFA allows to consider separately inputs of the production function, such as physical, labour and human capital from factors of the inefficiency model influencing the behaviour of opera houses. These latter factors represent the opera houses heterogeneity and show the influence on technical efficiency scores. Finally, we rank opera companies on the basis of the estimated technical inefficiency.
