Do motion picture incentives nudge productions to film in an adopting state, increase budgets, or hire more cast and filmmakers? Or do they simply subsidize productions that would have occurred regardless? Using California’s Film and Television Tax Credit Program, the author exploits incentives given out by lottery to answer these questions. The author finds that 19% of films would have filmed in California even without a tax incentive, but that the offering of an incentive increased the probability of a film being made in California by 16 percentage points. Both production budgets and the number of cast and filmmakers increased in response to the offering of a tax incentive, and, in California specifically, they increased budget spent by 267% and the number of cast and filmmakers hired by 123%. The program also had differential impacts based on film type, with only nonindependents increasing budgets and the number of cast and filmmakers in California.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.