Transcript slides

Using Visual Analytics to Evaluate the
Effectiveness of Public Subsidies: The Case of
Film Projects in South Africa.
Alan Collins
Alessio Ishizaka
Jen Snowball
ACEI Montreal Conference
2014
Creative industries and subsidy
• The case for subsidies
– Positive externalities (education,
culture)
– Merit goods
– Infant industry in global market
– Competition for FDI (jobs, skills,
economic impact)
• The case against
– Inefficiency (negative rates of return &
poor quality)
– Costly to governments
– Crowding out of private investment
– Encourages “subsidy wars”
The SA Film Industry
• 1910: Mainly for white
audiences; supported by
tax subsidies (1956 – 1992)
• Post 1992
– Cultural value films with
local content (NFVF)
VERSUS
– Economic impacts of film as
a “creative industry” (DTI):
employment, skills, GDP
SA Film & TV incentive schemes
Foreign Production and PostProduction Incentive
Attract large budget film and TV
productions that will enhance job
creation, skills and international
profile of SA film industry.
SA Film & TV Production and
Co-production Incentives
To support the local film industry
and to create employment in
South Africa.
Benefits
20% of Qualifying South African
production expenditure
(QSAPE) +5% if post-production
35% of first R6m of QSAPE, and
R25% thereafter
Eligible Applicants
1)
Objectives
2)
3)
QSAPE of R12m and above, 1)
at least 50% of principal
photography in South Africa,
4 week minimums
Post production QSAPE of
R1.5m and above, minimum
of 2 weeks
2)
Compliance with B-BBEE
3)
Parent company of which
must have a majority of
South African shareholders,
of whom at least one must
play an active role in the
production
Minimum QSAPE of R2.5m
Compliance with B-BBEE
Research Questions and
Data
• Have the DTI film & TV incentives been
effective in stimulating economic
growth, job creation, skills
development and transformation?
• Data: DTI incentives data (Feb 2009 –
June 2012) – boils down to 69
completed project returns for this
work plus informed by:
– Unpublished industry reports
– Interviews with key stakeholders
Does the subsidy work for all films?
Subsidy Concentration Index
(SCI) %
SCI (Top 3 Firms)
SCI (Top 5 Firms)
SCI (Top 10 firms)
2009
2010
2011
51.4
69.9
84.4
51.6
64.5
80.4
46.6
52.6
68.5
3 Year
Combined
43.0
60.0
73.4
Source: Authors’ calculations using DTI data
SCI determined by % share (of Top N firms) of total subsidy payments in each time
period.
Incentive payments, Qualifying SA Expenditure (QSAPE) and
GDP impact from 2009 – 2011
(in millions of South African Rands)
Production
Type
Incentive
payments:
QSAPE: 3
year average
Ratio of
Ave. increase
subsidy to in real GDP
QSAPE
p/a
257.74
1:5.36
605.68
333.44
1:3.98
783.59
356.73
1:6.65
838.31
947.90
1:5.11
2227.59
3 year average
(2009 – 2011)
South African 48.12
Production
Co83.79
Production
Foreign
53.63
Production
Total
185.54
All figures reported in 2010 prices
Sectoral multipliers from the South African Industrial Development Corporation
used to calculate changes in GDP.
Job creation of subsidised projects
South
African
CoProduction
Foreign
Total
Direct
FTE jobs
1120
Indirect
FTE jobs
2720
2417
3518
2163
3764
5700
10 002
Notes:
Employment duration weightings were
applied to convert project jobs for each
film/television project into 1 year full time
equivalent (FTE) employment
South African Industrial Development
Corporation (2010) employment multiplier
for the “Motion picture, radio, television and
other entertainment activities” of 4.49
Transformation?
Preference Ranking Organization METHod for the
Enrichment of Evaluations (PROMETHEE)
Why choose it?
How and What it does
•
It requires only a few parameters and is easy
to use and explain via non-technical userfriendly visualization software that is readily
available (Gilliams et al. 2005). Graphical
•
Analysis for Interactive Aid (GAIA).
•
Evaluation of each ‘performance’ criterion
can be expressed in their own natural
units and therefore problems relating to
scaling effects are completely eliminated.
•
•
•
Normalization of the scores is not
required.
•
The decision-maker needs to define a
preference function that is generally
characterized only by an indifference and
preference threshold.
See section 4 of our paper for an outline
summary.
Or see the outline and review of studies
deploying the technique in Brans and
Mareschal (2005) and Mareschal et al. (2008)
cited in our paper.
The upshot is that a score is produced that is
entirely relative to the pool of other
projects. The score is relative and sums to 0.
This means that if we have, say, only two
films and one has a score of 0.5, then the
second film will have a score of -0.5.
Criteria Considered by
Policymakers
•
•
•
•
•
•
Employment *
Black employment
Black ‘skilled’ employment
Spending in the economy *
International Investment
NOT Concerned with Quality
• Key finding: Considerable degree of orthogonality among
the employment and project spending criteria….
……Accordingly, there exists potentially considerable policy
tension among any partisan advocates of these objectives in
the contemporary South African context.
GAIA Plane – Equal Weighting of
Criteria
Project Scores
GAIA Plane: Total Black and Skilled
Black Criteria Doubled Weighted
Project Scores: Total Black and Skilled Black
Employment Criteria Doubled Weighted
GAIA Plane with ‘Ideal’ Film
Benchmark
Project Scores – With ‘Ideal’ Film Project
Benchmark
Results
Baseline Results
Benchmark Analysis
• These are robust and
suggest a threefold
categorization evident:
• The benchmark project
features the real top scores
on each criteria drawn from
actual projects within the
data
• As can be seen from its
score value and its relative
isolation visually there is
considerable distance
between it and the real
projects.
•
•
•
1) Projects scoring low in all criteria,
which are the majority of projects
2) Projects scoring high in QSAPE and
International co-production but
scoring low on employment criteria
(F43)
3) Projects scoring high in the
employment criteria and scoring low
in QSAPE and international coproduction.
Policy suggestions
• More nuanced Subsidy policy
• Differentiation needed for competitive fringe
• i.e. those with low score metrics (<0.1)