Arts, Markets, and Governments: A Study in Cultural Policy Analysis
Many arts firms are experiencing increasing costs relative to their revenues. This dissertation argues that demand management, if properly defined and pursued, represents at least a partial solution to this problem. First, an approach to demand expansion that depends on the luxury image of arts firms' products is compared both theoretically and empirically to one that emphasizes exposing new audience members to the arts. Data on symphony orchestras suggest that the first approach is more effective for lower-budget orchestras, while the second is better for larger orchestras. Second, the relationship between public subsidies to the arts and private philanthropy is examined. Whereas arguments could be made that public funds either leverage or crowd out donations, symphony orchestra data indicate that the two funding sources are in fact independent. Third, on the cost side, it is shown that the ability to lower costs by substituting part-time or noncontracted artists for some that are currently full-time may be an effective strategy to fight the cost-revenue gap, for some firms. Based on these results, it is argued that public arts policy that treats all firms homogeneously and restricts the use of funds is almost certainly suboptimal.
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TOWARD A DEMANDSIDE CURE FOR COST DISEASE IN
THE SEMIPROFESSIONAL ORCHESTRA AS A MODEL FOR ARTS
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Alfred Marshall American Symphony Orchestra argued artists arts funding arts sector arts subsidies ASOL audience average Backwards Stepwise Regressions Baumol benefits budgets causality concert conclusions conspicuous consumption consumers cost disease theory cultural economics curve data set demand side described discussion dissertation donated revenues Durbin-Watson statistic econometrically effect empirical equilibrium example explanation firm's Four Large Orchestras Fundraising Expenditures government funding government subsidies Granger Causality heteroscedasticity income gap instruments investment involvement luxury marginal marginal cost market failure Marshallian approach musicians negative externalities noted panel data percent performing arts firms period philanthropy policy analysis positive possible potential Potential Output private donations private market private philanthropy problem production and consumption public arts policy public subsidies question reason recording relative remedies repertoire result revenue sources rise scale of operations second chapter smaller orchestras specific statistical strategies tactics tend total revenues Veblenian approach wage Wolf Report