Artfilms, Handicrafts and Other Cultural Goods: The Case for Subsidy
AbstractThough widespread, the practice of public subsidies for cultural activity lacks a rigorous and consistent economic rationale. We analyze a canonical market structure that characterizes much cultural activity: the competition of mass-produced goods with heterogeneous non- standardized goods that are imperfect substitutes. We analyze several types of market failure: uncertainty about preferences (we do not know what we like, and we do not know what we might like in the future); endogeneity of preferences (we like what our neighbors talk about, and we like what we're accustomed to); and externalities associated with production (future production costs are determined by current production). The model provides a basis for cultural subsidies to promote social welfare and economic development.
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Bibliographic InfoPaper provided by EconWPA in its series Public Economics with number 0407001.
Length: 32 pages
Date of creation: 02 Jul 2004
Date of revision:
Note: 32 pages, Acrobat .pdf
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- Aubert, CÃ¨cile & Bardhan, Pranab & Dayton-Johnson, Jeff, 2003. "Artfilms, Handicrafts and Other Cultural Goods: The Case for Subsidy," Department of Economics, Working Paper Series qt62n4f3bh, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
- Z10 - Other Special Topics - - Cultural Economics - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-07-04 (All new papers)
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