Estimates of a Cultural Consumption Price Index by Australian Region

Abstract

We propose a method to construct a price index of cultural consumption in geographic space. The index — the CCPI — is calculated from a standardised cultural consumption basket purchased by a representative consumer over 30 locations in Australia, using 2010 price data. We use a full cost method (direct plus indirect cost) to estimate the index value of the cultural consumption basket; highlighting the extent that price differences by Australian location are accounted for by larger indirect costs (particularly travel) in consumption. The CCPI thus offers an empirical estimate of variation in the real cost of cultural consumption throughout Australia, based on existing investments and technologies with uniform preference. We find that the smaller cities of Perth and Adelaide have the lowest index value, with the larger cities of Sydney and Melbourne next. Regional centres have index values that range between 20 percent and 100 percent higher, and remote towns scored considerably higher again. We then recalculate the index based on non-linear per capita scaling, which shifts the index away from major cities and toward evidently productive smaller cultural centres including Byron Bay and Fremantle.

Keywords: Cultural consumption, price index, creative industries, urban studies

JEL Classification: Z11, D00