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Lead–lag relationship between household cultural expenditures and business cycles

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Abstract

This paper empirically examines how household cultural expenditures correspond to business cycles in Japan. Since income level is among the most important determinants of cultural demand, and income fluctuates with business cycles, examining the relationship between cultural expenditures and business cycles is useful, particularly in discussing income elasticity of cultural demand. The data used are monthly household expenditures for movies, live performances, and cultural establishments in the Family Income and Expenditure Survey. Turning points for cultural expenditures and related indicators are determined by estimating the regime-switching model. The lead–lag relationship between these series and the reference dates of Japanese business cycles are analyzed. The result indicates that cultural expenditures fluctuate cyclically with unstable leads and lags corresponding to business cycles. In addition, cultural expenditures adhere to smaller specific cycles within officially designated expansions, which imply that income elasticity has not been constant during past business cycles.

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Notes

  1. See Seaman (2006) for a comprehensive survey of factors of cultural demand.

  2. See Corning and Levy (2002) for seasonality in cultural variables.

  3. See Gray (2003) for a summary of the determinants of cultural demand.

  4. Another example of using time-series data in cultural economics is empirical analysis for arts market. See Frey (1997), Ashenfelter and Graddy (2006) and Ginsburgh et al. (2006) for general survey of art markets and see Ginsburgh (1995) and Singer and Lynch (1997) for examples of application of time-series data.

  5. Expenditures on cultural goods, such as musical instruments, cultural appliances (e.g. cameras, audio sets), books and CDs, are excluded.

  6. See Katsuura (2009) for a similar analysis using a moving average series.

  7. See Layton and Katsuura (2001) for the cases of the U.S., Japan and Australia.

  8. Other than \( P(s_{t} = i|\Upphi_{t} ),P(s_{t} = i|\Upphi_{t - 1} ) \) and \( {\text{P}}(s_{t} = i|\Upphi_{T} ) \) can be used as filtered probability (T denotes sample size). See Kim (1994) for full sample smoothing to derive \( P(s_{t} = i|\Upphi_{T} ) \).

  9. See Kim and Nelson (1999) for details of the RSM and Layton and Katsuura (2001) for the application to Japanese data.

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Authors and Affiliations

  1. Faculty of Economics, Meijo University, 1-501 Shiogamaguchi, Tempaku-ku, Nagoya, Aichi, 468-8502, Japan

    Masaki Katsuura

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  1. Masaki Katsuura
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Correspondence to Masaki Katsuura.

Additional information

This paper is based on a presentation at the ACEI 16th International Conference on Cultural Economics, Copenhagen, 2010. The author is grateful to the discussant and attendants of the session, and two anonymous referees of the journal, for their helpful comments. This research was partially supported by the Telecommunications Advancement Foundation grant-aid, 2011.

Appendix

Appendix

See Table 5.

Table 5 Whole cycles of variables and reference dates
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Katsuura, M. Lead–lag relationship between household cultural expenditures and business cycles. J Cult Econ 36, 49–65 (2012). https://doi.org/10.1007/s10824-011-9155-1

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