Article ID: | iaor20112675 |
Volume: | 35 |
Issue: | 2 |
Start Page Number: | 171 |
End Page Number: | 180 |
Publication Date: | Apr 2011 |
Journal: | Journal of Productivity Analysis |
Authors: | Song Seongho, Yi T |
Keywords: | art, efficiency, estimation, stochastic frontier, charities |
This article examines how efficient art organizations are in raising funds from private giving. We measure fundraising efficiency using a Bayesian estimation approach using the stochastic frontier production model. We show that fundraising efficiencies are generally quite low for art organizations in the U.S. when private giving is only considered as a fundraising output; however, when the effect of fundraising on ticket sales is considered, fundraising efficiencies improve substantially. We also show that government grants have a negative impact on fundraising efficiency and therefore partially crowd out private giving.