The Benefits and Attractiveness of Local Theatres: Comedy or Shakespeare – Does It Matter?

In most countries, cultural institutions are heavily supported by public funds. In the literature, this is explained by expected externalities, meaning that not only users, but also non-users benefit from the existence of cultural institutions. However, there is little knowledge about what these externalities consist of, and how they relate to the characteristics of the supply. The main aim of this study is to investigate the perceived benefits of theatres serving the local community, and whether the type of theatre matters. Using data from a large-scale survey conducted in Denmark in the spring of 2020, we find that the type of theatre has a significant impact on the values perceived by the users, while non-users show no preferences for the types of theatre located in the municipality. Therefore, we conclude that non-users have little understanding of the externalities provided, and the type of supply is of no consequence for non-users’ valuation.