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Title: The Investment Determinants of Cultural Building

Citation Type: Miscellaneous

Publication Year: 2011

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Abstract: Investment into the supply of cultural facilities exceeded the demand for them, particularly between 1998 and 2003. Consequently, cultural organizations in cities across the U.S. were faced with dilemmas about how to remain viable after indulging in capital projects. Using data for all MSAs across the U.S., I develop a model that explains the investment determinants of cultural building. I use a two-part model to estimate the effects of capital and labor stock, cultural, demographic, and economic variables on per capita total investment into cultural facilities. I estimate these effects for the period between 1994 and 2008, the period with the greatest level of building the boom period (1998-2003) and then the entire period excluding the boom. My findings suggest that increases in investment were in part due to rising population, education and wealth levels. I present evidence for a positive relationship between the existing level of capital stock in a city and the amount it invests and a negative relationship between per capita investment and labor stock. Finally, I show that in the period between 1998 and 2003 the boom period there was a misalignment of investment and its determinants and suggest that there was overinvestment into cultural facilities during this period.

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Authors: Woronkowicz, Joanna

Publisher: University of Chicago

Data Collections: IPUMS USA

Topics: Other

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