This article can be found in the current issue of the Journal of Urban Affairs regarding Urban Economics.
Can tax incentives create a local film industry? Evidence from Louisiana and New Mexico, by Patrick Button
State film incentives (SFIs) are a recent and popular economic development incentive. I study these through case studies of two prominent SFIs—those in Louisiana and New Mexico—using the synthetic control case study method. This allows me to estimate the effect of SFIs relative to “business as usual”: what would have happened without SFIs. I estimate the effects of these SFIs on filming location, using databases from IMDb and Studio System, and on business establishments and employment in the motion picture production industry using the Quarterly Census of Employment and Wages. My results show increases in feature films but not TV series filming, employment, or business establishments. This suggests that though there are some benefits to these incentives, their ability, under favorable circumstances, to develop a local film industry is very limited.