Essays on cultural economics

Introduction

Audience and participation surveys often argue that performing arts audiences consist of relatively well-off

citizens while the audiences of sport events and cinemas are different. Sport events, especially football and

ice hockey matches are favoured by middle-class males and the cinema lovers at young students. A large

amount of economic and sociological research has been done to classify different cultural consumption

patterns. The economics of cultural consumption has traditionally focused on explaining attendance figures

and studying the socioeconomic characteristics of the audience. Cultural consumption is connected with

leisure activities of consumers. They might choose to go the cinema, go to an ice hockey match, go to the

opera or theatrical performances, etc. depending on their preferences and the amount of leisure time and

incomes. Time constraints are related to the place of residence to the leisure time and budget constraint to

personal or household incomes and to the price of the entrance ticket. Ruuskanen (2004) has also shown

that skilled workers are engaged more in several types of activities while the time use of low-educated is

more monotone. In Finland art institutions, like opera and theatre houses are located in bigger cities but

there are some theatre groups making tours in the countryside, still the place of residence is a very

important factor to explain consumers’ cultural participation decisions. However, cultural consumption is

not just going to see art exhibitions, opera or theatrical performances. Some of the consumers prefer sport

events and films. Limited leisure time restricts and these cultural events are substitutes to some extent.

However, are these events really substitutes or rather complements? Budget constraints can limit the

participation so that consumers can only choose one cultural event and therefore different events are

substitutes. But on the other hand some culturally oriented consumers can accumulate positive

experiences and these can induce further consumption. In this case cultural events are complements. The

sociology of cultural participation has shown that consumers can be classified into three groups: omnivore,

paucivore and inactive (Alderson, Junisbai and Heacock 2007). The omnivores are active in all cultural

consumption, from cinema to classical music. The paucivores go to see all kinds of cultural activities but less

than the omnivores. To the omnivores cultural events are complements.

Irrespective of the cultural events being complements or substitutes, the quality of the event is important

from the viewpoint of enjoying. Consumers can obtain some information about the quality from

advertising before purchasing the entrance ticket. Advertising may convey hard facts, vague claims or

favourable impression of a product. The informational content of advertising depends on whether

consumers can determine the quality of that product before buying. If the consumer can value a product’s

quality by inspection before buying it, the product has search qualities or the product is a search good.

However, if the consumer must consume the product to determine its quality, the product has experience

qualities or the product is an experience good (Nelson 1970). Advertising provides direct information about

the characteristics of products with search qualities, their main attributes can be determined by visual or

tactile inspection (e.g. clothes) or by a test drive or trial (car). Experience goods must be consumed before

its quality can be determined (e.g. processed foods, software programs, and gymnastic exercises). The early

writers in the 1950’s considered advertising as being manipulative (Kaldor 1950) and therefore it reduces

competition and welfare since advertising persuades consumers to purchase more heavily advertised

products even though there is no quality difference between otherwise equal or comparable products. The

price of the highly advertised products rises and therefore the advertising serves as an entry-deterring

mechanism. If advertising is predatory, the incumbent firm is capable of creating an entry-deterring

strategy (Cubbin 1981). More recent authors propose that advertising serves as a tool for transmitting

information from producers to consumers about differentiated brands and therefore reducing the search

costs and increasing welfare (Benham 1972).

Nelson (1974) argues that producers of high-quality experience goods can spend more money on

advertising because first-time consumers are more likely to be satisfied with the quality and will make

repeat purchases, than with low-quality experience goods. Consumers do not depend on information

received through producers’ advertising when they buy search goods since they receive that information by

inspection or trial. So the effects of advertising vary between search goods and experience goods and there

is more intensive advertising with experience goods. On the other hand Schmalensee (1978) argues that

low-quality brands are more frequently purchased and low-quality producers advertise more intensively.

The recent rise of social media has substantially changed the media usage of advertising campaigns.

Consumers trust more on recommendations from other consumers, e.g. word-of-mouth or blogs than on

paid advertising (Viljakainen, Bäck and Lindqvist 2008 or Karjaluoto 2010).

Producers (distributors, importers) can use other means to signal about the quality of their products, not

just advertising but also product labelling or branding, reputation, guarantees or expert ratings. Some fruits

and vegetables are sold without a brand name. Consumers might assume that a banana is a banana and

there is a little variability across producers or countries of origin. However, there are strong and universal

brands also, like Chiquita and consumers attach this brand and trustworthy quality. If a large proportion of

sales is generated by customers who do not repeat their purchases – like tourists – the reputation of a shop

matters less, since a few customers are familiar with the shop’s reputation (Carlton & Perloff 1990, 530). To

the contrary consumers who repeat purchases are willing to repurchase cultural and other goods if their

past experiences are positive and producers’ signals have less importance. Especially committed ice hockey

fans repeat their purchases and regularly go to the ice hockey stadium. The impact of advertising on the

match attendance is minor.

Several studies have shown that there is a substantial seasonal variation in leisure time use. During the

winter, leisure is more sports oriented while during summer more socially oriented (Niemi and Pääkkönen

1992). Men’s ice hockey is the most popular sport in terms of total attendance. The regular season in the

highest league in Finland begins in September and ends in March. After that there are some play-off

matches in March and April. Also the movie attendance statistics in the first essay show that the summer is

the weakest time by attendance. Most citizens have their holidays in summer but they do not seem to go

to cultural or sport events even if there was plenty of leisure. The socio-economic status of the consumer

has an effect on leisure activities. Unemployed have more leisure but less income. Ruuskanen (2004) has

shown that both net wage and the yearly income of the spouse has a negative effect on the joint time spent

together, the number of children reduces joint leisure time of spouses and university education increases

the time spent together in leisure. Both the age and health situation of consumers have an impact on the

leisure time and how active the leisure is (Piekkola and Ruuskanen 2006). Both unemployed and employed

older men are more active in leisure if they are thinking that they are healthy, but the relation is not so

obvious for younger men. Older women are more active during their leisure than younger women. The

child care does not restrict any more. Already teenaged girls are more active in participation in cultural

activities except the movies (Pääkkönen 2010, 234) even the amount of leisure is lower for girls than for

boys.

Stigler and Becker (1977) introduced the concept of cultural capital developed by the aggregation of past

consumption of cultural goods. The accumulation function is related to human capital, i.e. formal

education. Cultural behaviour is determined by consumer’s budget, time, social, physical constraints and

formal education (Frey 2000). People with higher education have on average less leisure than those with

lower education, the higher educated have a bigger variety at leisure (Ruuskanen 2004, 136).

Different terminologies have been used to rank tastes, like: highbrow – middlebrow – lowbrow, or high –

popular, or legitimate – vulgar. This division has been used frequently in the sociology of cultural

consumption. With Swedish data Bihagen and Katz-Gerro (2000) show that women are more active in

highbrow consumption (opera, dance or theatrical performances) and men in low, like watching television

(entertainment, sport). Highbrow television (documentary, culture, news) and lowbrow culture (films) are

less connected to gender and formal education but Warde and Gayo-Gal (2009) show that these are

strongly related to age. The omnivore group is associated with legitimate taste that is aesthetically the

most valuable. Omnivorousness increases with age up to around 50 and strongly diminishes among those

over 70.

In Finland, the economics of culture has been less studied. There are a few surveys on the cinema

spectators (Suomalaisen elokuvan markkinat ja kilpailukyky 1999, Kotimaisen elokuvan yleisöt –tutkimus

2010), theatre and opera audiences (Kivekäs 1991, Suomalaisten teatterissa käynti 2007, Mikkonen and

Pasanen 2009), audiences of sport events (e.g. Kansallinen liikuntatutkimus 2010) and a substantial amount

of sociological studies on the cultural consumption (e.g. recently Virtanen 2007 or Purhonen, Gronow and

Rahkonen 2010). Most surveys present descriptive statistics of the audience but there are virtually no

studies that use more advanced econometric methods. Virtanen (2007) using frequency and contingency

tables, the analysis of variance and logistic regression methods showed that the education, age and socio-

economic status have important explanation power in highbrow cultural consumption in the whole

European Union area. However, these variables can explain only 10 – 15 per cent of the variation in

consumption choices. Purhonen, Gronow and Rahkonen (2010) showed using logistic and Poisson

regression analysis that regardless of how omnivorousness is operationalized, different socio-economic

variables are better to explain literature taste than musical taste. The socio-economic variables are gender,

age group, education and the place of residence. Income level is not significant.

The purpose of this study is to use advanced econometric methods to explain cultural consumption choices

in Finland and to get more information on this topic. The study is a combination of five separate papers in

cultural economics. The connecting factor is information and its use among audiences of different cultural

events. The cinema audience is the topic in the first study. Conventionally it is argued that the biggest

group in the cinema audience consists of young people of age 15 – 24 (Suomalaisen elokuvan markkinat ja

kilpailukyky, 1999, 89). What is the role of public information on the decision to going to the cinema? Will

they read critical reviews from the newspapers before they make the decision to choosing between

different movies in the repertoire? The second and the third essay are studying the audiences of the ice

hockey matches of the men in the champion league (Sm-liiga). What is the role of the winning percentage

of the home team and of the visitor team on the attendance? Since typically the audience is male dominant

who read carefully the sport pages in the newspapers where the series situation is published that

information might have an important impact on the attendance figures. The fourth and fifth essays are

studying what is the composition of the audiences of highbrow arts in relation to cinema and sports. Are

these audiences different and how? The essays draw a picture on omnivore consumers and how sensitive

their consumption patterns are. In the concluding chapter we also draw some tentative conclusions how

inactive can be encouraged to consume or invest more in cultural capital.

Essay 1: Critics review or preceding week’s admissions explaining movie admissions

The first essay considers movie attendance in Finland in 2003 explaining the number of spectators of the

most 20 popular films in each week. The total number of films on distribution was 225 but with only 177

premieres. Many films had the first evening during preceding December in 2002 since it is widely known

that the Christmas season is top time. Seasonal variation is large, during the summer the attendance figures

are the lowest. Variation across films is also large. The aggregate attendance in 2003 was roughly 7.7

million and the top 10 got roughly 42 % of the spectators. Since both the weekly (time series) and movie

specific (cross-section) variation is substantial, conventional regression methods are unsuitable. A panel

data analysis enables regression analysis with both time-series and cross-sectional dimension.

In 2003, the average duration of movie runs in Finland was four months for the top 10 films and roughly

one month for the median film in respect of the spectator number. Hence, spectators have had enough

time to reveal the necessary information on the quality of the film from various sources. The essay studies

the role of word-of-mouth and critical reviews in explaining movie attendance. Critical reviews are

published in the weekly magazine supplement ‘Nyt’ for the newspaper that has the largest circulation in

Finland, Helsingin Sanomat. World-of-mouth is measured by the previous week’s attendance figure at the

cinemas in Helsinki. Since more than a fourth of young audience (age-group: 15-24) are heavy users and

since they read less newspapers than older citizens in Finland the role of critics review is probably lower

than the role of word-of-mouth. Consumers in general rely more on the word-of-mouth than on other

forms of information (Viljakainen, Bäck and Lindqvist 2008, 25). The first essay verifies that when the world-

of-mouth is taken into account, the critics review is not a significant variable to explain movie attendance.

Since admission figures are typically the highest during the first weeks, a variable “weeks since released” is

used to control for this peak. The analysis shows that it is significant, as well as the price variable. The price

elasticity of weekly movie admission is roughly -1 which shows some monopoly pricing potential. Panel

data analysis also indicates that the fixed effects model is the most suitable for explaining weekly movie

admissions in Finland in 2003.

Essay 2: Demand for ice hockey, the factors explaining attendance of ice hockey games in Finland

The second essay studies the ice hockey match attendance during the regular season 2007 – 2008 in

Finland. The ice hockey league, ‘SM-liiga’ is the most important live cultural event or series of cultural

events in terms of attendance per event. Movies yearly attendance is three times to the ice hockey matches

but these and opera or theatrical performances are live events. At the opera and theatre there is a

manuscript that they follow and thus the possibility of surprises is smaller but a match has more

uncertainty. The home team might win or lose the match depending on the quality of the team and the

visitor among others. The regular season usually begins in September and ends in the following March. The

number of regular season matches was 392. The total attendance was 1.964.626 i.e. 5012 per match.

Besides these matches there were play-off matches in March and April but these matches were left out

from the examination due to the different nature of these events. The Finnish data on the recent

International Social Survey Programme (ISSP 2007) reveals that almost 40 % of the population never goes

to see a sports activity (ice hockey, football, athletics, motor racing etc.), less than 8 % attends several times

a month and the rest (i.e. more than 50 %) occasionally. The same survey also shows that physical exercise

(active sport consumption) is more common than passive sport consumption (table 1: Sports consumption

in Finland 2007).

Daily Several times a week

Several times a month

Occasionally Never Total, n

How often do you attend a sports activity?

4 (0.3%) 17 (1.3%) 82 (6.2%) 691 (52.3%) 526 (39.8%) 1320

How often do you attend a sports activity? (Female)

1 (0.1%) 5 (0.7%) 38 (5.1%) 327 (44.2%) 369 (49.9%) 740

How often do you attend a sports activity? (Male)

3 (0.5%) 12 (2.1%) 43 (7.6%) 358 (63.3%) 150 (26.5%) 566

How often do you exercise sports?

301 (22.6%) 546 (41.0%) 272 (20.5%) 183 (13.8%) 28 (2.1%) 1330

How often do you exercise sports? (Female)

189 (25.5%) 308 (41.5%) 144 (19.4%) 92 (12.4%) 9 (1.2%) 742

How often do you exercise sports? (Male)

106 (18.5%) 230 (40.1%) 127 (22.2%) 91 (15.9%) 19 (3.3%) 573

Table 1: Sports consumption in Finland 2007, Source: ISSP 2007. Own calculations

There is a significant difference between genders so that males are more active in passive sport

consumption (attendance, Mann-Whitley U-test, z= -8,430, sig. = 0,000) while females are more active

exercisers (Mann-Whitney U-test, z=-3,858, sig=0,000). Active and passive (attendance) sports consumption

are only slightly positively correlated (Kendall’s τ = 0,054, n = 1314, sig. = 0,028). There is also a negative

relationship between age and passive sports consumption (Spearman’s ρ = -0,182, n = 1265, sig. = 0,000).

For female, the negative relationship is somewhat stronger (Spearman’s ρ = -0,193, n = 724, sig. = 0,000)

than for male (Spearman’s ρ = -0,179, n = 540, sig. = 0,000). Another survey (Liikuntatutkimus 2005-2006,

Sport Survey: Adult Population) on adult population sport consumption – both active and passive – in

Finland was carried out few years ago1. The sample size was 5510. In this survey 44% responded that they

had not attended any sports event between February 2005 and January 2006. The most popular sports in

terms of attendance were ice hockey (25.5%), football (16.9%), athletics (10.6%), skiing (6.5%) and Finnish

rule baseball (5%). The largest positive correlation is between ice hockey and football attendance.

Attendance and income level (8 categories from the lowest to the highest) are not correlated (not reported

here).

Popularity Ice Hockey Football Athletics Skiing F Rule Baseball

Ice Hockey 25.5%

F: 14.6%

M: 36.4%

1

Football 16.9%

F: 11.0%

M: 22.8%

0.323 (0.000)

F: 0.353 (0.000)

M:0.193(0.000)

1

Athletics 10.6%

F: 9.9%

M: 11.3%

0.093 (0.000)

F: 0.133 (0.000)

M: 0.031 (0.108)

0.123 (0.000)

F: 0.156 (0.000)

M:0.074 (0.000)

1

Skiing 6.5%

F: 6.3%

M: 6.6%

0.009 (0.517)

F: 0.002 (0.909)

M: 0.015 (0.431)

0.022 (0.110)

F:0.019 (0.315)

M: 0.024 (0.216)

0.147 (0.000)

F:0.150 (0.000)

M: 0.143 (0.000)

1

F Rule Baseball 5.0%

F: 3.9%

M: 6.1%

0.098 (0.000)

F: 0.085 (0.000)

M: 0.096 (0.000)

0.056 (0.000)

F: 0.050 (0.009)

M: 0.049 (0.010)

0.056 (0.000)

F: 0.053 (0.006)

M: 0.058 (0.002)

0.014 (0.295)

F: 0.024 (0.212)

M: 0.001 (0.942)

1

Table 2: Attendance popularity and correlation among adult population in Finland. 2005-2006. n = 5510. Significance in parenthesis. Legend: F = female n = 2754, M = male n = 2756

1 Recent (February – March 2007) Eurobarometer 67.1 reports that almost 56 % in the sample (n = 1054 in Finland) had not attended any sport event during the last 12 month period. The figure was lower for male (44%) than for female (65%).

Tables 1 and 2 indicate that more than half of the adult population (age between 15 and 74 in ISSP 2007)

have attended a sport activity and for half of these has the ice hockey match has been that event.

The sociology of sport consumption has revealed that there are substantial motive differences between

genders. A well-known classification is Sport Fan Motivation Scale (SFMS) by Wann (1995). There are eight

motives: eustress (i.e. the need for positive stress), self-esteem (i.e. the desire to maintain a positive self-

concept through team success), escape (i.e. sport as diversion from bored everyday life), entertainment,

economic (i.e. gamble on the events), aesthetic (i.e. sport as an art), group affiliation (i.e. belongingness

need), and family (i.e. opportunities to spend time with family). Wann conducted a quantitative

examination with a 23-item Likert scale questionnaire. Using confirmatory factor analysis the above

mentioned eight internally consistent, reliable and criterion valid motives were found. The original sample

consisted of primarily of university college students. Several studies, however, confirmed the results (e.g.

Wann, Schrader & Wilson 1999, Wann, Royalty & Rochelle 2002, Wann, Robinson, Dick & Gillentine 2003,

Ridinger & Funk 2006, Wann, Grieve, Zapalac & Pease 2008 or Koo & Hardin 2008). Eustress, self-esteem

and group affiliation motives were more associated with team and aggressive sport type (e.g. football, ice

hockey) rather than individual and nonaggressive sport type. On the other hand aesthetic motive was

associated with individual and nonaggressive sport type (e.g. figure skating, tennis). Wann, Schrader &

Wilson (1999) also classify sport spectators as intrinsically or extrinsically oriented. Fans that enjoy sport

because of its aesthetic and artistic movement (intrinsic) may not bother of their favorite team’s or

individual’s poor performance since the aesthetic performance of the event is present regardless of the

outcome. On the other hand extrinsic fans (self-esteem, economic motives) could find unpleasant to watch

their favorite team’s games unless the team is victorious. Self-respect and self-fulfillment are more

associated with women’s team spectators (Kahle, Duncan, Dalakas & Aiken 2001) while self-indulgence is

more men’s team spectators’ attribute. The opportunity to spend time with family or sense of belonging or

socialization is attributes associated with women’s sport spectators (Kahle, Duncan, Dalakas & Aiken 2001

or Ridinger & Funk 2006). Females seem to be more sport fans for social reasons (Dietz-Uhler, Harrick, End

& Jacquemotte 2000) while males are more likely to be fans because they play sports and want to acquire

sport information (e.g. read sport pages in newspapers).

The second essay (”Demand for ice hockey, the factors explaining attendance of ice hockey games in

Finland”) particularly studies among others the effects of public information on the ice hockey attendance

figures. Since men typically read the sport pages of newspapers the home team’s performance is well

known. The performance is operationalized as the points per game measure (success). There are four

alternatives: a win within the normal playing time (60 minutes) produces 3 points, an win within extension

time (> 60 min) or a penalty shot win produces 2 points, a lost within extension time or after penalty shots

produces 1 point, and a lost within normal playtime gives 0.

The results indicate that both the population of the town of the home team and of the visitor have a

statistically significant effect on attendance. The distance between home team’s town and visiting team’s

town is also significant, i.e. local games have a bigger attendance than other games. The demand is not

elastic with respect to the ticket price. Loyal supporters have a season ticket, but the share of season ticket

holders in the audience is not known. Success of both the home team and the visitor has an effect: home

team’s success with a positive and visitor’s with a negative coefficient. The number of plays already played

has a negative effect. Weekday effect is important: the attendance is bigger during Saturdays. Also the day

temperature has an effect: the colder, the bigger attendance. That effect is small but still statistically

significant. The unemployment rate has no effect, and the success factor of the last three games (the form

guide) does not seem to explain as well as the success factor of all games played.

With caution it can be argued that ticket price has a slight effect on attendance, since demand seems to be

inelastic. However, the price variable is not the actual average price since this data was not available. The

price variable used in the estimations is the ticket price to the best seats. As the season goes on and more

games have been played, the attendance seems to diminish but the estimated coefficient is low even

though significant. Team’s success seems to attract a bigger attendance while visitor’s success has the

opposite effect. Spectators are willing to see live game in the stadium if they expect that home team will

win the game. The local unemployment rate has no effect on attendance while weather condition

measured by the outside temperature is a significant variable. A colder weather attracts more spectators.

However, the estimated coefficient is minor but significant. The estimation results reveal that the models

can explain about two thirds of actual attendance based on the coefficient of determination.

Essay 3: Fan loyalty in Finnish ice hockey

Fan loyalty is the topic of the third essay. Sport has become more professional over the years. Sport

managers view their teams or leagues as brands to be managed. A product or service is considered as a

brand if the name, logo, sign or slogan increases the value of that product or service. The psychological

aspect in the consumer’s mind, the brand image consists of all information and associations with a product

or service. The third essay studies fan loyalty in Finnish men’s ice hockey during the regular season 2008-

2009 using stochastic frontier analysis. Most teams in the highest ice hockey league are local monopolies

but there are two teams in Helsinki which might be substitutes since the distance between their stadiums is

less than 3 km. Moreover, there is one team in the neighbouring city, Espoo, whose stadium is at a distance

of about 13 km from the previous. In addition there are two teams in Tampere with a shared stadium.

However, some teams are local monopolies and some teams meet higher competition. Therefore brand

loyalty or fan loyalty might differ according to the competitive position and the aim of this research is to

study the relationship between the fan loyalty and the competitive position of teams. The competitive

position is defined here as the geographical distance between teams’ stadiums.

Teams in the champion league generally raise funds from not just gate revenues but also from merchandise

sales, the sales of broadcast rights and commercial sponsorships. Loyal fans use various fan products such

as fan shits and scarves. Broadcast rights are usually sold by the league association and the broadcast

revenue is shared among the teams. Sponsorship revenue depends on the popularity of the team which in

turn is associated with larger market base, i.e. larger home town population. Depken (2000, 2001)

measures fan loyalty by efficiency score in stochastic frontier analysis, Winfree, McCluskey, Mitterhammer

and Fort (2004) by the permanency of successive years’ attendance and Brandes, Franck and Theiler (2010)

by mean match tickets per market size. Also direct surveys to get self-revealed levels of fan loyalty have

been used. Wakefield and Sloan (1995) show that fan loyalty increases home game attendance. The third

essay follows Depken and uses a panel data of Finnish men’s champion league ice hockey attendance

during the regular season 2008-2009 with stochastic frontier analysis. There were 406 games played during

that season beginning in September 2008 and ending in March 2009.

The explanatory variables used in this study are conventional and consistent with other studies (for a

review, see Borland and MacDonald 2003 or Simmons 2006): home town population, visitor’s town

population, distance between teams’ home stadiums, the winning percentage of the home team and of the

visitor team, the game round, the local unemployment rate. The time specific variables are weekday

dummies and the outside temperature. The error term has two components ε* i = εi – ln(λi) in which εi is the

random error term that captures noise as well as team and time-specific unobserved heterogeneity

(Greene 2005).The inefficiency term λi in the stochastic frontier is time invariant and team specific. Two

possible distributions have frequently been used (see Greene 2008, 538): the absolute value of a normally

distributed variable (“half-normal”) and an exponentially distributed variable. The distributions are

asymmetric. However, the problem with stochastic frontier analysis is that the error term distribution

assumption has its effects on the magnitude of the measure of the fan loyalty. If the team specific term is

fixed, one of the teams is considered strong (as 100 % strong) in the sense of fan loyalty. Fans are

committed. The fan loyalty of the other teams is relative to the best-practice team(s) in the sample (cf. Last

and Wetzel 2010).

The fixed effects model is here more plausible since it captures both the relevant explanatory variables for

attendance and the inefficiency scores. The estimated coefficients of the explanatory variables are in line

with those reported in the previous literature. Since the team loyalty scores are correlated with the

distance measure, the fans are more committed to ice hockey and not to a particular team. The brand of ice

hockey is stronger than the brand of an individual team. This is consistent with the results of Bauer, Sauer

and Exler (2005) that show that non-product-related attributes (e.g. stadium and regional provenance) are

more important for fan loyalty than product-related attributes like players, success, and general team

performance. It is clear that fan loyalty offer opportunities for monopoly pricing.

Essay 4: Spectators of performing arts – who is sitting in the auditorium?

The fourth essay examines the performing arts audiences using a bivariate probit and multivariate logit

analysis. According to the statistics, around 5 per cent of the Finns go to see performing arts (art

exhibition, opera or theatrical performances) diligently and roughly 80 per cent occasionally (ISSP 2007).

Audience and participation surveys argue that participation is segmented. Highbrow consumption is related

to gender, age and formal education. Women are more active in highbrow art consumption while men

favour sports. The purpose of the fourth essay is to analyse differences in the visitor density in more detail.

Can differences be observed between the regions when, for example, the effect of the educational

background is taken into account? A bivariate probit model is useful because it estimates simultaneously

two equations in cultural participation decisions. It also allows to study whether there is significant

correlation between the equations’ random disturbances. With this method, the principal characteristics of

the performing arts and the sport events audiences can be identified. Using Finnish data a study like this

has not been conducted earlier.

The ISSP 2007 survey was carried out between 18th September and 11th December 2007 through a mail

questionnaire in Finland. The ISSP is a continuous programme of cross-national collaboration on social

science surveys. The surveys are internationally integrated. In Finland, the ISSP surveys are carried out

together by three institutions: Finnish Social Science Data Archive, The Department of Social Research at

the University of Tampere and the Interview and Survey Services of Statistics Finland. The cultural

participation questions in the ISSP survey were: “How many times in the past twelve months have you seen

an art exhibition, opera or theatrical performance?” and “How many times in the past twelve months have

you been attending a sport event (ice hockey, football, athletics, motor race, etc.)?” Five alternatives were

given: ‘Every day’, ‘Several times a week’, ‘Several times a month’, ‘Less often’ or ‘Never in the last twelve

months’. However, it is widely known that the categories “every day” or “several times a week” or “several

times a month” get a small number of respondents and it is reasonable to combine these categories with

“less often” (e.g. Vander Stichele and Laermans 2006). One step further is to assume that the error terms of

two explanatory models are correlated. One model is estimated for highbrow (ballet, dance performance,

opera) and another for sports (lowbrow). The first step in the essay is to use the multivariate analysis of

variance (MANOVA) to simply compare the variance between the sample means explained by explanatory

variables.

There are differences in highbrow visitor density of across separate groups: “often”, “less often” and

“never”. The results of the multivariate analysis of variance show that gender, age, education and the place

of residence are significantly different across separate groups. However, the multivariate analysis of

variance only reveals that there are differences but it does not show the direction of the effect, i.e. it does

not show whether for example women are more active than men in highbrow performing art consumption.

The multinomial logit model (MNL) is the second step in the essay to find out what is the direction of the

explanatory variables on art consumption. The explanatory variables in MNL are the following: gender,

classified age, education, the classified place of province. The classification is needed since there are good

reasons to assume that the effect of age is not linear. On the contrary previous studies have shown that

middle-aged people are most active performing art consumers. According to the Statistics Finland, the

economy of culture (value added per capital in 2007) is highly concentrated (Figure 1)

Figure 1: Value added of culture in 2007, EUR/capita in NUTS3 and Capital regions in Finland, Source: Statistics Finland

The capital region has clearly the highest value added of culture per capita and 48 % of the culture labour is

located there. The turnover share of the capital region is 65%. In the MNL analysis one region must be

considered as the reference value and the effects of region variables are relative to this reference region.

The reference values in the MNL analysis are the following: Rural area exemplified by Northern Finland

(FI1A according to the NUTS-2 classification), pupil or student (education 1), young person (age: 15-24). The

region variables are mainly compatible with the NUTS-2 classification except the provinces of Uusimaa and

Ahvenanmaa.

The results of the MNL show that the ones that “often” go to performing art performances or exhibitions

have graduated from the upper secondary school (edu5) or have a bachelor’s degree (university of applied

sciences, edu7 or university, edu8) or have a master’s degree (edu9). Middle-aged people (age between 45

and 54 or between 55 and 64) go most diligently. Gender is important: women are more active than men.

The above mentioned socio-economic variables, college level education (edu6) and somewhat younger (age

between 35 and 44) are significant to classify “less often” group from other visitor density groups. Regional

differences are significant. Citizens of the province of Uusimaa or the region of Eastern Finland are the most

active. A conclusion from the MNL models is that a crucial feature to classify into not attending and

attending groups is at least upper secondary school. Furthermore the separating feature between less often

and often groups is at least a bachelor’s degree and 45 year age. Women on average are more active in

highbrow art consumption. Furthermore, the essay studies what is the role of gender and other socio-

economic variables in sport events’ attendance.

The visitor density of sport events attendance is also investigated using a MNL model. As it is the case in

participating arts model, the sports events model has three groups: “often”, “less often” and “never”.

Gender separates but men are significantly more active than women. This result is in line with the

participation motive models (Wann 1995) and with the statistics of the most popular sport events. Ice

hockey and football are the most popular sports in terms of attendance and both could be classified as

aggressive. A low education level (elementary school, edu2 or comprehensive school, edu3) is typical for

those that are the most active and age less than 45. The results are mainly opposite with the performing

arts participation results. However, the performing arts visitor density is added as an explanatory variable,

it has a positive coefficient meaning that these two cultural segments have a common feature. Those that

are active in highbrow art consumption are also active in sport event consumption. This is especially true

for those that are “less often” goers. High education seems to be the common feature. There are no

regional differences in sport consumption. The findings are consistent with time-use survey evidence that

highly-educated perform more activities and these include the consumption of cultural capital (Ruuskanen

2004).

Since there is a common factor in both participating arts (art exhibition, opera and theatrical performances)

and sport events consumption, the bivariate profit model must be used to study the participation equations

simultaneously. The fundamental difference between multinomial logit models and bivariate probit models

is to assume that the error terms of two explanatory models are correlated. One model is estimated for

highbrow (ballet, dance performance, opera) and another for sports (lowbrow). The multinomial logit

model estimates only one equation to explain cultural consumption but it allows more than two categories

(‘often’, ‘less often’ and ‘never’) while a bivariate probit model assumes that there is a binary variable to be

explained. If the disturbances of the bivariate equations are correlated, both the direct marginal effects

and the indirect marginal effects can be evaluated. The general specification for a two-equation model

assuming the binary choice is (Greene 2008, 817):

y1¿=x1

' β1+ε 1 , then y1=1 if y1¿>0 ,∧ y1=0otherwise

y2¿=x2

' β2+ε2, then y2=1 if y2¿>0 ,∧ y2=0otherwise

E [ε 1|x1 , x2 ]=E [ ε2|x1 , x2 ]=0

Var [ε1|x1 , x2 ]=Var [ε2|x1 , x2 ]=1Cov [ ε1 , ε2|x1 , x2 ]=ρ

The marginal effects of each explanatory variable are more reasonable since both the direct marginal effect

and the indirect marginal effect can be estimated. Since education for example has an effect on both

cultural segments (arts and sports) the indirect effect reveals whether these cultural segments are

substitutes or complements. If the direct marginal effect of (say) master’s degree education (edu9) is

positive for arts and indirect marginal effect is negative the arts and sports consumption are substitutes for

this socio-economic group. The results of the bivariate probit model confirm the effects of gender,

education and age. Women are active in highbrow consumption and men in sport events consumption.

Direct marginal effects of the education are significant if the education level is equal to or higher than

upper secondary (college, a bachelor’s or master’s degree). The threshold age is 35. Older than 35 prefer

arts and they diminish sport events consumption. The indirect marginal effects of education levels 6, 7 and

9 (a college diploma, and a bachelor’s degree from university of applied sciences or a master’s degree)

reveal that these citizens consider arts and sport events as substitutes. The correlation coefficient ρ of the

error terms of the equations is 0.382 showing that the audiences of arts and sports have a common

feature.

Essay 5: Are the spectators of performing arts and the spectators of the movies the same?

The fifth essay uses a similar framework than the fourth essay but the comparison is made between

performing arts and cinema and the effects of household incomes and family background have been added

as explanatory variables. The marginal effects of the socio-economic variables on the performing art

consumption in the multivariate logit model are examined using the ISSP 2007 survey data.

The descriptive statistics of the explanatory variables reveal that age (age-group) and education are related.

Most of the youngest in the sample were pupils or students (at a comprehensive, an upper secondary, a

vocational school of course or at a college) and correspondingly the oldest had a rather low education

(elementary or comprehensive school). A college level education was mainly replaced by bachelor’s degree

education in the early 1990’s and therefore people having a bachelor’s degree from a polytechnic

(university of applied sciences) are somewhat younger than persons having a college diploma. People less

than 50 –years old on average have a (better and) longer education than people older than 50. Age and

education are related with the household or personal incomes. Middle-aged and high-educated seem to

have the highest incomes (including all social security contributions, e.g. child benefit that may explain why

the age-group 30-34 has the highest incomes). There are some differences in education between genders.

Men are somewhat less educated than women. Since the income variable in the sample includes all social

security contributions (e.g. child benefit) the number of children in used as an explanatory variable. There

are two different variables: the number of less than 6-year-old children and the number of 7-17-year-old

children.

The results of bivariate probit analysis when the age-cohort 50-54 and elementary school (edu2) are

considered as reference value (i.e. the constant in the equation) show that two spectator groups are not

independent since the correlation coefficient of the error terms ρ = 0.625. Hence the hypothesis that

spectators of movies and arts belong to independent groups can be rejected. There are common

characteristics, a common background which could be called an intrinsic culture orientation. If a person

likes art exhibitions, opera and theatrical performances, she also likes to see movies at the cinema and vice

versa given that the institutions in the region offer these events. Those that are inactive and culture

orientated do not go to exhibitions or performances and to the cinema. However, there are some particular

effects that are related with exhibitions and performances or with movies. The importance of gender is very

strong: females are more active in both arts (highbrow) and movies. The direct marginal effect of gender

(female) is positive but the indirect marginal effect is negative. Both the direct and indirect marginal effects

have been reported only for the highbrow art (art exhibition, opera and theatrical performances). The

negative indirect effect describes the preference of seeing a film on the cinema. These leisure time

activities are to some extent substitutes. Marital status matters: married or common-law married citizens

go more often to highbrow art than single people.

If the effect of age on cultural consumption is relative to the age cohort 50-54, all younger cohorts prefer

more movies and only the oldest (70-74) seem to go less often to the cinema than the reference group. The

indirect marginal effect of age on highbrow art is negative for each younger age cohort. The direct marginal

effects of cohorts are not significant. The results indicate that age is not a relevant variable to classify

highbrow art consumption into active and inactive groups. Education seems to be very important to classify

culture consumption structures. When the reference level is elementary school (edu2), citizens with any

other education level are significantly more active in culture consumption, in both directions: highbrow art

and movies. Omnivores have a higher level of education. Household’s size matters only indirectly to

highbrow art consumption since bigger families seem to favour movies. The number of small children (less

than 7) or older children (7-17) significantly reduces both culture consumption segments. The household

incomes (or personal incomes – not reported here) are not significant.

The age cohorts 30-34 and 35-39 are most omnivore but this indication is unreliable to some extent. The

results of the MNL analysis confirm the importance of gender. Females are more active to go to an arts

exhibition, opera and/or theatrical performances. Both the marginal effects of the gender variable or over

individuals show that females most often belong to the group ‘less often’ (occasionally). The only marital

status variable to classify into three groups is ‘married’. There are no differences if the person is the person

is single or living in common-law marriage. Married people most often belong to the group ‘less often’. The

age cohort 25-29 is most passive in going to see performing arts. Surprisingly the older age-cohorts (55-59,

65-69 and 70-74) are most active. The oldest seem to strongly classify into totally not-going and actively

going groups but the probability of belonging into ‘less often’ –group is the lowest. Education is very

important to classify performing arts consumption.

Conclusions

The essays have added information on the economics of culture in Finland. The sophisticated methods have

been used. The role of public, non-advertising information on the cultural consumption decisions has been

underlined. Critical reviews published in the newspapers do not have an impact on movie admissions when

the world-of-mouth is taken into account. In the ice hockey case, however, the public information in the

form of series situation or the winning percentage of the team has an impact on the attendance figure.

Furthermore there is some evidence that ice hockey fans are more committed to the sport (species) than to

the team. The brand of ice hockey is stronger than the brand of an individual team.

The audience composition can be studied using bivariate probit analysis. This analysis is an important

method to classifying audiences of different cultural events and simultaneously to classifying consumers

into omnivore and other groups. The results indicate that the time constraints on leisure activities are

connected with the number of children in the family. Formal education is an important factor to classify

consumers into different groups. Highly educated are more active in highbrow consumption but they go

less often to sport events. However, the omnivorousness increases with formal education. Gender

differences are important in both the performing art consumption and the sport consumption.

Intellectual assets including cultural capital are highly agglomerated in greater Helsinki area (Helsinki, Espoo

and Vantaa). 52% of cultural capital and 48% of intangible capital is located in the capital region with a

population share of 30%. These areas also have on average more educated inhabitants with human capital.

Cultural capital has been shown to be sensitive to the human capital of the attendees. High skilled are

typically more active than low educated and are engaged in several type of activities including cultural

events.

Essays show that sport consumption has similar types of characteristics although is less elitist and typically

favoured by men. 25% of total population attend at least once a year in the ice hockey match and the

preferences are fairly price inelastic. Fans are loyal to local ice hockey team, also to a large extent

irrespective of its success or failure. The latter results only to limited substitution of less successful team

with the one with better recent performance. Fans are still loyal to ice hockey and not to the team. All this

offers opportunities for monopoly pricing and we have observed in recent years substantial increase in the

ticket prices.

Movie attendance has price elasticity minus one, which as such follows the optimal pricing rule of

monopolies. Movies are the most homothetic product in cultural capital, at least in respect of the most

popular movies, though the number of annual attendees various to significantly greater degree than in ice

hockey or in highbrow culture. In the late,r the policy is usually to satisfy all supply though special discounts

e.g. in last minute reservations.

One can also categorize the cultural capital in terms of the degree of experience consumption. Movies

stand out again as the cultural capital with the least surprise content and hence most close to experience

consumption. Highbrow cultural capital is less frequent and includes the biggest unknown element

although in certain dimensions sports are the most unpredictable.

All these findings have big importance in the evaluation of cultural policy and subsidies for cultural

consumption. The inelastic part is quite insensitive to subsidies and it is expected that rather high share of

kulttuuriseteli subsidies benefit the price elastic cultural activities such as theatre. It is also noteworthy that

price elasticity is likely to be lower for high educated that can better afford allocate their time to several

activities. On the other hand, high educated are more time constrained and do more voluntary work.

The study also shows clear substitutability between highbrow cultural capital and movies. Cultural capital is

highly concentrated in the greater Helsinki area and there is every reason to believe that more fair regional

distribution will lead to much greater demand for highbrow cultural capital. Cultural capital policy is

important regionally also because it has been shown that older people consume it less and hence the

demand for cultural capital can be subject to dramatic changes in the rapidly ageing areas, many of which

are located in rural areas in eastern and northern Finland.

Is cultural capital enjoyment or long-term investment? This study shows in many respects low price

elasticity and hence the importance of non-monetary reasons for cultural capital consumption. Clearly price

mechanism has only limited role or can lead easily to monopoly pricing rules, where our price elasticities

shows some evidence in movie attendance. This is supported by the surprisingly limited role that critics

have on the consumer decisions. It is also noteworthy that the price elasticity in Finnish movie consumption

has been found to be lower than observed in Great Britain or United States (Davis 2002, 2006).

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