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Studying “Sponsored Goods” in Cultural Sector. Econometric Model of Baumol’s Disease

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  • Рубинштейн Александр Яковлевич

Abstract

The paper presents the second part of the study of “sponsored goods” in the cultural sector. It describes economic activities of theaters, concert organizations and museums in three dimensional index space coordinate axes being the lag of labor productivity, faster growth of salaries and tickets prices in relation to the corresponding macroeconomic indices. The methodology of constructing such indexes and statistical data used for this purpose are described in the first article published under the title “Symptoms and consequences of Baumol's cost disease in cultural sector: an econometric study of “sponsored goods”. The aim of the present article is to construct and analyse econometric model of cost disease based on statistical data on activities of Russian theaters, concert organizations and museums for the period of 1994-2010. The regression analysis based on structural model that reflects theoretically predictable links was chosen as a method of study. Such links include first, influence on cost growth of lag of labour productivity in arts organisations and parallel trend in salaries. Second, dependence of increase of income of such organizations on dynamics of labour productivity and ticket prices, third, balanced equation - product of equilibrium conditions for sponsored goods that describes the interrelation between costs of production, prices and budget subsidies. The calculations made it possible to construct basic and modified econometric models that establish statistical correlations between income deficit and three regressors, namely indexes of labour productivity, salaries and ticket prices. As a result of this model the article presents projections of regression relation of income deficit on «expenditures plane», «income plane» and «economic results plane». Theequations derived allow to conclude that there is a statistically significant income deficit negative elasticity by labour productivity index, positive elasticity by salaries index and ticket price index, as well as rising dynamics of Russian performing arts organization income deficit and its compensation in the nearest future.

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  • Рубинштейн Александр Яковлевич, "undated". "Studying “Sponsored Goods” in Cultural Sector. Econometric Model of Baumol’s Disease," Working papers a:pru175:ye:2013:1, Institute of Economics.
    • Handle: RePEc:rua:wpaper:a:pru175:ye:2013:1
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    References listed on IDEAS

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    1. A. Bhargava & L. Franzini & W. Narendranathan, 2006. "Serial Correlation and the Fixed Effects Model," World Scientific Book Chapters, in: Econometrics, Statistics And Computational Approaches In Food And Health Sciences, chapter 4, pages 61-77, World Scientific Publishing Co. Pte. Ltd..
    2. Gapinski, James H, 1986. "The Lively Arts as Substitutes for the Lively Arts," American Economic Review, American Economic Association, vol. 76(2), pages 20-25, May.
    3. V.A. Ginsburgh & D. Throsby (ed.), 2006. "Handbook of the Economics of Art and Culture," Handbook of the Economics of Art and Culture, Elsevier, edition 1, volume 1, number 1, December.
    4. Victor Ginsburgh & David Throsby, 2006. "Handbook of the economics of art and culture," ULB Institutional Repository 2013/1673, ULB -- Universite Libre de Bruxelles.
    5. Heilbrun,James & Gray,Charles M., 2001. "The Economics of Art and Culture," Cambridge Books, Cambridge University Press, number 9780521637121.
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    Cited by:

    1. Rubinstein, A., 2014. "Introductory Note," Journal of the New Economic Association, New Economic Association, vol. 24(4), pages 182-184.

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    More about this item

    Keywords

    sponsored goods; cost disease; Baumol’s indexes; econometric models; income deficit;
    All these keywords.

    JEL classification:

    • C43 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods: Special Topics - - - Index Numbers and Aggregation
    • L38 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Public Policy
    • Z1 - Other Special Topics - - Cultural Economics
    • Z11 - Other Special Topics - - Cultural Economics - - - Economics of the Arts and Literature

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