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Artfilms, handicrafts and other cultural goods: the case for subsidy

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  • Cécile Aubert

    (GREThA - Groupe de Recherche en Economie Théorique et Appliquée - UB - Université de Bordeaux - CNRS - Centre National de la Recherche Scientifique)

Abstract

Though 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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Cécile Aubert, 2007. "Artfilms, handicrafts and other cultural goods: the case for subsidy," Post-Print hal-00153233, HAL.
    • Handle: RePEc:hal:journl:hal-00153233
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    Cited by:

    1. Pranab Bardhan, 2006. "Globalization, Inequality, and Poverty," IDB Publications (Working Papers) 9126, Inter-American Development Bank.

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    More about this item

    JEL classification:

    • 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

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