‘Bitzer,’ said Thomas Gradgrind. ‘Your definition of a horse.’ ‘Quadruped. Graminivorous. Forty teeth, namely twenty-four grinders, four eye-teeth, and twelve incisive. Sheds coat in the spring; in marshy countries, sheds hoofs too. Hoofs hard, but requiring to be shod with iron. Age known by marks in mouth.’ Thus (and much more) Bitzer. ‘Now girl number twenty,’ said Mr Gradgrind. ‘You know what a horse is.’ The opening chapters of Dickens’ Hard Times probably have all of us recoil at the insistence of Mr Gradgrind on a school where … [Read more...]
Economic Impact: A Quick and Dirty Critique
Teaching arts policy this fall, I needed a two-page briefing to warn my students off using economic impact studies as an arts advocacy tool. Here's the result: What is an Economic Impact Study? Definitions are hard to come by. I can tell you how a number is calculated, so let’s start there. Pick a sector: it can be film production in a state, or nonprofit arts organizations, or cranberry farming, or anything. First ask: What were total sales in that sector in a state over the course of a year? That should be easy to figure – every … [Read more...]
Voting for arts funding – a short video
We are making the adjustment to teaching arts policy at a distance for the remainder of the semester, and so I'm about to get used to (and hopefully better at) short videos for students, practitioners, anyone with an interest. In this one - I kept it to eighteen minutes - I talk about a study I did on the 2002 referendum in Metro Detroit that would have seen a property tax increase to provide funding for a number of arts organizations. It failed. In my study I took precinct-level voting data, matched the precincts to census tracts, and … [Read more...]
Metrics at the museum
The Washington Post's Philip Kennicott decided to try visiting the popular Kusama exhibit at the Hirshhorn not as a critic, with all its special viewing privileges, but as an ordinary member of the public. The crowds and the rush, as we might expect, reduced the quality of the experience. We might enjoy a play or concert more when the house is full, but that doesn't apply so well to museums. In one well-executed piece of research, Maddison and Foster found visitors would be willing to pay a significant entry fee to the British Museum if it … [Read more...]
Dynamic pricing and market segmentation at the theatre (and the hospital)
This post is about theatre pricing, from a unlikely source. Today's New York Times has a piece by Austin Frakt on hospital pricing, and whether and how changes in funding of patients through public sector programs might change hospital charges to privately insured patients. Mid-way through, the article looks for an analogy from the arts: The theory that hospitals charge private insurers more because public programs pay less is known as cost shifting. What underlies this theory is that a hospital’s costs — those for staff, equipment, supplies, … [Read more...]
Pay-what-you-decide at the theatre
The Stage News reports on a trial run of pay-what-you-decide pricing at the regional theatre in Stockton, UK: The Pay What You Decide system is now in effect for all theatre productions at the arts centre for six months, following a trial on a one-man show at the venue. Too Much, Too Young, starring Jack Bennett in January, took nearly 50% more than the theatre expected, with almost one third of the audience new to theatre performances at the ARC. Although the theatre would usually charge £10 for a show such as Too Much, Too Young, … [Read more...]
Efficiency in Fund Raising – A Technical Note
The National Center for Arts Research has released its report on The State of the Arts - a compendium of data and what I call 'kitchen sink' regressions (i.e. looking for statistical relationships by including all data that might conceivably matter and seeing what comes out the other end, rather than generating the regressions through a more formal model of firm behavior. Not that there is anything wrong with that - I've done it myself in research papers). In their section on fundraising, they find: The average organization brought in … [Read more...]
Price discrimination and timing
Publishers delay the release of paperback versions of books as a means of price discrimination. 'Strong' customer markets pay the premium price for the immediately available hardcover, while 'weak' customer markets pay the lower price for the paperback, which is inferior in two ways: less sturdy binding, and you have to wait a year or so to obtain it. This earns more for the publisher than releasing all versions at one time. This strategy is only used where there is a premium attached to immediate access, such as the most popular fiction and … [Read more...]
The superstar economy
The distribution of artists' earnings is heavily skewed, much more unequal than in the population as a whole, between some who earn very, very much and those whose earnings are negligible (if not zero, in their search for free exposure). The economic analysis of 'superstars', pioneered by Sherwin Rosen, finds that when given a choice audiences will, by a great majority, buy from what is considered to be the very best, and so the very best capture the lion's share of the earnings. When are earnings likely to be most skewed? There are two main … [Read more...]
Sir Alan Peacock
I was saddened to read of the death of Sir Alan Peacock, a most influential figure in the scholarship, and application, of economic analysis of the arts. The Daily Telegraph's obituary is here. I remember back to when I first began exploring the field of cultural economics, and his (then recent) book Paying the Piper was one of the first I picked up on the subject. Years later when the International Journal of Cultural Policy invited a group of us to write a short essay on the book that had most influenced us, that was my choice. … [Read more...]