Managerial and Policy Efficiency Evaluation of Public-Funded Performing Arts: The Case of Opera Houses

Abstract

Exploring sources of inefficiency is an important issue for opera houses that are publicly regulated and run chiefly via public funding. Using data from German and Italian opera houses, in this article we use an approach based on data envelopment analysis (DEA) methodology to evaluate internal managerial efficiency and efficiency ascribable to the environment in which opera houses work. Further, we investigate productivity growth by building a convenient decomposition of the Malmquist index. The approach adopted could support managers of cultural organizations and cultural policy makers in discerning sources of inefficiency.

Keywords:

• Performing arts
• opera houses
• decomposition of efficiency
• data envelopment analysis (DEA)
• Malmquist index

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 We point out that our analysis differs from other approaches that consider the effect of some specific environmental variables on the DEA efficiency scores, such as the two-stage DEA-OLS (Banker and Natarajan 2008) and the DEA-truncated regression (Simar and Wilson 2007) models.

2 There are currently fourteen “Lyric-Symphonic Foundations” in Italy. Two Foundations were excluded from the analysis, namely the “Accademia di Santa Cecilia” and the “Teatro Petruzzelli di Bari,” the former because it is uniquely devoted to the symphonic repertoire, the latter because it was closed for restoration work during the period under review. Although there are other opera houses in Italy (for instance, the “Teatro Massimo Bellini” in Catania), we have focused specifically on the “Lyric-Symphonic Foundations” recognized by the Italian Legislative Decree n. 367/1996 that represent the main opera houses in Italy. The reason is mainly due to their homogeneity in terms of juridical form, access and criteria for public fundings, national collective labor agreement and data accessibility.

3 German opera houses, unlike Italian opera houses, also offer musicals and operettas. In particular, operetta is very popular in German-speaking countries; whereas, of the Italian opera houses, only the “Teatro Lirico G. Verdi di Trieste” offers an operetta festival every year. In Table 2, the operettas produced by the “Teatro Lirico G. Verdi di Trieste” have been recorded among the operas.

4 https://www.buehnenverein.de/de/publikationen-und-statistiken/statistiken.html

5 http://www.beniculturali.it; http://www.corteconti.it/index.html

6 For instance, Frey and Pommerehne (1987) cited a drama requiring large crowds that were replaced by an actor with special scenic arrangements.

7 We have carried out a supplementary efficiency analysis applied to the German opera houses by using attendance as output in place of revenues, while keeping the other variables unchanged. The corresponding efficiency scores were then compared with those obtained in the actual efficiency analysis. The results, not reported here, reveal that the correlation coefficient between the two sets of efficiency scores ranges from 0.94 to 0.99 depending on the year under consideration. Hence, using attendance instead of tickets and subscriptions revenue does not alter the efficiency results for the German opera houses.

8 http://ec.europa.eu/eurostat/web/hicp/data/database