Tax relief for British theatre (updated)

how shall we spend it?

The budget just announced by the British government provides for significant tax relief for live performing arts. Here are reports from The Stage, The Telegraph, and The Independent. The Stage gives details as follows: The scheme will mean producers are able to claim up to a 25% tax rebate on 80% of a production’s up-front eligible budget costs ahead of its run. Touring shows will receive a 25% relief, while other productions will be eligible for a 20% tax credit. It will benefit both commercial and subsidised producers, because the … [Read more...]

The economic impact of everything

I feel you

Going to a bar to watch basketball, for example. From the New Republic: Nearly one-third of Americans plan to watch games at work this year, according to a survey from the consumer site RetailMeNot. One in five men said they’d go to a bar to watch at lunch. But? March Madness may actually be good for the economy—and for individual companies. Go on ... Hotels and restaurants in the 14 cities that host games will gain the most, thanks to traveling fans cheering on their teams. But even businesses in non-host cities can benefit. That same … [Read more...]

The future of nonprofits?

zero marginal cost?

Commercial or nonprofit? In studying the cultural sector one of the key questions asked is why we see both kinds of firms in the arts, where nonprofits are more concentrated in some sub-sectors than in others, and I pose the question to my students: how does an entrepreneur choose the organizational form for her new enterprise? Today in the Times we have an opinion piece by Jeremy Rifkin, 'The Rise of Anti-Capitalism', who posits that the nonprofit sector is bound to rise in importance over the next few decades, not because of long-running … [Read more...]

A Cautionary Note on the Social and Economic Value of the Arts

think of the grandchildren

Arts Council England has released a new report on The Value of Arts and Culture to People and Society: An Evidence Review. What to make of it? From the foreword by the Chair of the Council, Sir Peter Bazalgette: Of course the inherent value of arts and culture is, in part, a philosophical assertion that can’t be measured in numbers. Quantifying the benefits and expressing them in terms of facts and figures that can evidence the contribution made to our collective and individual lives has always presented a problem, but it is something that … [Read more...]

Economics of deaccessioning (a bit theoretical) (updated)

sounds tempting

Why is it so wrong that a museum would sell works from its collection? More specifically, why is it wrong to sell works where the proceeds from the sale would not be committed to the purchase of other works for the collection? I know of the policies of the Association of Art Museum Directors against the practice, but I am economist by training, and I remember when first studying in the field of cultural economics to being a little puzzled: what is so bad about having the freedom to manage and trade assets over time to ensure the institution is … [Read more...]

When dynamic pricing makes sense

use this fern for $2 an hour

"Let's move before the raise the parking rate." Palmerston North, New Zealand, has the latest in dynamic pricing for parking. From Offsetting Behavior (via Marginal Revolution): The 33-space carpark in the city’s Church Street has been kitted out with solar-powered sensors by local parking technology firm Frogparking that can tell which parks are occupied. Drivers pay for parking through their smartphone. Frogparking has been providing ticketless parking systems to Palmerston North for a few years, but director Don Sandbrook said the new … [Read more...]

the sunk cost fallacy

sunk

You've got to know when to fold 'em. Yesterday at Indiana University we hosted Peter Frumkin, who talked about his new book (co-authored with Ana Kolendo) Building for the Arts: The Strategic Design of Cultural Facilities. The book contains a range of case studies of significant building or renovation of cultural facilities in the United States. A key finding, maybe not surprising, is the very high proportion of projects for which new revenues were highly overestimated, and costs of construction, and subsequent operations, were highly … [Read more...]

Do we need more Nutcrackers?

think of the overtime we could earn!

Matt Yglesias thinks there could be benefits for the economy if we had a little more Christmas. Maybe he is being tongue-in-cheek, but for what it's worth I will take him at face value: The real economic case for Christmas is macroeconomic. There's an old Keynesian saying: It takes a lot of Harberger triangles to fill an Okun Gap. Which is to say that the total amount of harm done by micro-inefficiencies is small compared with the massive harms associated with the macroeconomic slack of recessions. Most people do not realize this because … [Read more...]

What is a movie star worth?

don't forget to negotiate a share of foreign box office

Is there pay discrimination against female movie stars? Helaine Olen at Reuters thinks so. She writes: Why should we begrudge [Robert] Downey a $50 million payday for The Avengers? The film brought in $1.5 billion globally. Downey’s take was a mere 3 percent of the haul. However ... Hunger Games producers first signed [Jennifer] Lawrence to a deal in 2011. She was still a relative unknown, albeit one with an Oscar nomination on her credits. So they could sign her to play the lead, Katniss Everdeen, for less than $1 million — a relative … [Read more...]

Droit de suite

how much to the artist?

Legislation is proposed to bring droit de suite - a rule in which some artists receive a share of proceeds from some resales of their art - to the United States. The New York Times reports here, and blog neighbour Lee Rosenbaum analyses the proposal here. I will just deal with one point. Patricia Cohen in the Times writes: Artists have long complained that unlike composers, filmmakers or writers, they do not receive a share of future sales. But that is a very partial view. All artists in all genres can receive one or both of two kinds of … [Read more...]