Working Paper: NBER ID: w25963
Authors: Patrick Button
Abstract: I estimate the impacts of recently-popular U.S. state film incentives on filming location, film industry employment, wages, and establishments, and spillover impacts on related industries. I compile a detailed database of incentives, matching this with TV series and feature film data from the Internet Movie Database (IMDb) and Studio System, and establishment and employment data from the Quarterly Census of Employment and Wages and Country Business Patterns. I compare these outcomes in states before and after they adopt incentives, relative to similar states that did not adopt incentives over the same time period (a panel difference-in-differences). I find that TV series filming increases by 6.3 to 55.4% (at most 1.50 additional TV series) after incentive adoption. However, there is no meaningful effect on feature films, and employment, wages, and establishments in the film industry and in related industries. These results show that the ability for tax incentives to affect business location decisions and economic development is mixed, suggesting that even with aggressive incentives, and "footloose" filming, incentives can have little impact.
Keywords: tax incentives; business location; economic development; film industry
JEL Codes: H25; H71; L82; R38; Z11
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| State Film Incentives (SFIs) (H29) | Filming of TV Series (L82) |
| State Film Incentives (SFIs) (H29) | Employment in Film Industry (L82) |
| State Film Incentives (SFIs) (H29) | Wages in Film Industry (J31) |
| State Film Incentives (SFIs) (H29) | Establishments in Film Industry (L82) |
| State Film Incentives (SFIs) (H29) | Filming of Feature Films (L82) |