Prof J. Lowell
Spring 2012
Economics 191AC
The Economics of the Arts and Culture
COURSE SYLLABUS – UCSB Spring 2012, v.1
Contact info:
Professor Julia Lowell
North Hall 3020
lowell@econ.ucsb.edu
Classes:
Monday/Wednesday 2-3:15pm
Bldg 387
Office Hours:
Monday/Wednesday 1-2pm
Final Exam:
TAKE HOME FINAL
Handed out Wednesday, June 6
**Due Monday, June 11 at NOON**
Assignments:
Short problem sets (consisting of 1-2 problems) or data-gathering
exercises will be assigned regularly
Economics 191ac is a survey of the economics of the arts and culture, with a focus on the
nonprofit performing and visual arts. Topics to be covered include defining the arts and
culture, consumer demand for the arts, production in the performing and visual arts,
public good aspects of the arts, public and private support for the arts, and the economic
impact of the arts and culture on local communities. A class project to characterize the
cultural economy of two medium-sized U.S. cities will be a central component of the
course.
Textbooks & Readings
Heilbrun, James, and Charles M. Gray, The Economics of Art and Culture, Second
Edition, Cambridge, UK: Cambridge University Press, 2001.
Caves, Richard E., Creative Industries: Contracts Between Art and Commerce,
Cambridge, MA: Harvard University Press, 2000.
Two copies of Heilbrun and Gray and one copy of Caves are available on reserve at
Davidson Library. Most readings (including textbook chapters) are also available in the
password-protected “Readings” folder on the class website (always check this first), by
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Prof J. Lowell
Spring 2012
direct download from the internet, or through the UCSB library’s electronic journals
collection. As relevant, links are provided below.
Please complete the readings listed for each class before class. There may occasionally
be additions or substitutions to the list; these will be announced at the end of class and
posted on the class website.
Class Project
A key component of this class will be a project to characterize the arts and cultural
“ecosystem” for two American cities. To the extent we can, we will estimate the size and
economic contribution to the area of selected cultural activities in terms of number of
businesses, value of output and expenditures, and employment. We will also consider
any non-economic benefits that cultural activities may bring to a city or region. Project
research will be conducted by teams of 4-5 students.
The final two (or three) classes of the quarter will be set aside for student project
presentations.
Grading
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Class participation and assignments (15%)
Midterm (15%)
Final (40%)
Project presentation (30%)
No makeup exams will be given in this course. If you miss the midterm exam your final
exam will count for 60% of your course grade instead of 40%.
CLASS SCHEDULE AND ASSIGNED READINGS
WEEK 1
Class 1
Mon 2 April
Lecture: What is art? What is culture? Characterizing the arts sector
Suggested Readings
McCarthy, Kevin F., Arthur Brooks, Julia Lowell, and Laura Zakaras (McCarthy et al,
2001), Chapter 2, “Conceptual framework,” in The Performing Arts in a New Era,
MR-1367-PCT, Santa Monica, CA: RAND, 2001, pp. 5-10. Available at
http://www.rand.org/pubs/monograph_reports/MR1367/.
Heilbrun & Gray, Chapter 1, “An overview of the arts sector,” pp. 3-10, and first section
of Chapter 2, “Growth of the arts sector,” pp. 11-24.
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Spring 2012
Class 2
Weds 4 April
Lecture: Demand for the arts: patterns of participation
Required Readings
Heilbrun & Gray, Chapter 3, “Audiences for the arts,” pp. 40-57.
Supplemental Readings
Robinson, John P., “Survey organization differences in estimating public participation in
the arts,” Public Opinion Quarterly, Vol. 53, 1989, pp. 397-414.
Schuster, J. Mark, , “Comparing participation in the arts and culture”, in S. Tepper and B.
Ivey, Engaging Art: The Next Great Transformation of America’s Cultural Life, New
York: Routledge Taylor & Francis Group, 2008, pp. 49-84.
WEEK 2
Class 3
Mon 9 April
Lecture: Demand for the arts: characteristics of demand
Required Readings
Heilbrun & Gray, Chapter 4, “Consumer demand: an introduction,” pp. 61-84.
Heilbrun & Gray, Chapter 5, “Arts demand and policy implications,” pp. 85-106.
Supplemental Readings
Courty, Pascal, “Some economics of ticket resale,” Journal of Economic Perspectives,
Vol. 17, No. 2, Spring 2003, pp. 85-97.
Felton, Marianne V., “On the assumed inelasticity of demand for the performing arts,”
Journal of Cultural Economics, Vol. 16, No. 1, 2002, pp. 1-12.
Seaman, Bruce A., “Empirical studies of demand for the performing arts,” in Victor A.
Ginsburgh and David Throsby, eds., Handbook of the Economics of Art and Culture,
Volume 1, Amsterdam: Elsevier B.V., 2006, pp, 415-472.
Class 4
Weds 11 April
Lecture: Artists and performing arts organizations
Required Readings
Heilbrun & Gray, Chapter 14, “The arts as a profession: education, training, and
employment,” pp. 311-335.
Caves, Richard E., “Covering high fixed costs,” Chapter 14 in Creative Industries, pp.
223-237.
Richter, Matthew, “The nonprofit motive,” The Stranger, April 27-May 3, 2006 issue,
available online at http://www.thestranger.com/seattle/Content?oid=31920.
Supplemental Readings
McCarthy et al, 2001, Chapter 6, “Characteristics of performing arts organizations,” pp.
51-76. Available at http://www.rand.org/pubs/monograph_reports/MR1367/.
DiMaggio, Paul J., “Nonprofit organizations and the intersectoral division of labor in the
arts,” paper prepared for the The Nonprofit Sector: A Research Handbook, 2nd edition,
2006.
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Spring 2012
WEEK 3
Class 5
Mon 16 April
Lecture: Firms and markets in the performing arts
Required Readings
Heilbrun & Gray, Chapter 6, “Production in the performing arts,” pp. 107-115.
Heilbrun & Gray, Chapter 7, “Firms and markets in the performing arts,” pp. 116-136.
Supplemental Readings
Seaman, Bruce A., “Competition and the non-profit arts: the lost industrial organization
agenda,” Journal of Cultural Economics, Vol. 28, 2004, pp. 167–193.
Class 6
Weds 18 April
Lecture: Firms and markets in the performing arts—the commercial arts
Required Readings
Caves, Richard E., “Contracts for creative products: films and plays,” Chapter 6 in
Creative Industries: Contracts Between Art and Commerce, Cambridge, MA:
Harvard University Press, 2000, pp. 103-120.
Caves, Richard E., “The nurture of ten-ton turkeys,” Chapter 8 in Creative Industries, pp.
136-145.
Caves, Richard E., “Creative products go to market: books and records,” Chapter 9 in
Creative Industries, pp. 146-171.
Supplemental Readings
Eliashberg, J., A. Elberse, and M.A.A.M. Leenders, “The motion picture industry:
critical issues in practice, current research & new research directions,” Harvard
Business School Working Paper No. 59, February 2005.
UK Department for Culture, Media and Sport, The Impact of New Technologies on the
Music Industry, April 2000.
WEEK 4
Class 7
Mon 23 April
Lecture: Financial situation of the performing arts
Required Readings
McCarthy et al, 2001, Chapter 7, “Financial situation of performing arts organizations,”
pp. 77-105. Available at http://www.rand.org/pubs/monograph_reports/MR1367/.
Heilbrun & Gray, Chapter 8, “Productivity lag and the financial problem of the arts,” pp.
137-162.
Supplemental Readings
Caves, Richard E., “Donor-supported nonprofit organizations in the performing arts,”
Chapter 15 in Creative Industries, pp. 238-252.
Caves, Richard E., “Cost disease and its analgesics,” Chapter 16 in Creative Industries,
pp. 253-267.
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Spring 2012
Class 8
Weds 25 April
Lecture: The market for visual arts products
Required Readings
Heilbrun & Gray, Chapter 9, “The market in works of art,” pp. 165-186.
Caves, Richard E., “Artists, dealers, and deals,” Chapter 2 in Creative Industries, pp. 3751.
Supplemental Readings
Caves, Richard E., “New versus old art: Boulez meets Beethoven,” first section of
Chapter 22 in Creative Industries, pp. 348-356.
Mei, Jiangping and Michael Moses, “Art as an investment and the underperformance of
masterpieces,” American Economic Review, Vol. 92, No. 5, 2002, pp 1656-68.
WEEK 5
Class 9
Mon 30 April
Lecture: Visual arts organizations
Required Readings
McCarthy et al, 2005, Chapter 6, “Visual art organizations,” pp. 75-103. Available at
http://www.rand.org/pubs/monographs/MG290/.
Heilbrun & Gray, Chapter 10, “The economics of art museums,” pp.187-216.
Supplemental Readings
Caves, Richard E., “Filtering and storing durable creative goods: visual arts,” Chapter 21
in Creative Industries, pp. 329-347.
Blau, Judith R., “The disjunctive history of U.S. museums, 1869-1980,” Social Forces,
Vol. 70, No. 1, 1991, pp. 87-105.
Johnson, Peter and Barry Thomas, “The economics of museums: a research perspective,”
Journal of Cultural Economics, Vol. 22, 1998, pp. 75–85.
Class 10
Weds 2 May
MIDTERM EXAM
WEEK 6
Class 11
Mon 7 May
Lecture: Justifications for public support of the arts
Required Readings
Heilbrun & Gray, Chapter 11, “Should the government subsidize the arts?,” pp. 219-249.
The American Assembly, “The arts and the public purpose,” in G. Bradford and M. Gary,
The Politics of Culture: Policy Perspectives for Individuals, Institutions, and
Communities, New York: The New Press, 2000, pp. 64-70.
Supplemental Readings
Wali, Alaka, Rebecca Severson, and Mario Longoni, “The informal arts: finding
cohesion, capacity and other cultural benefits in unexpected places,” executive
summary of a report submitted to the Chicago Center for Arts Policy at Columbia
College, May 2002.
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Prof J. Lowell
Spring 2012
Class 12
Weds 9 May
Lecture: Public and private support for the arts
Required Readings
Heilbrun & Gray, Chapter 12, “Public and/or private support for the arts in the United
States, Australia, Canada, and Western Europe,” pp. 250-277.
Heilbrun & Gray, Chapter 13, “Direct public support for the arts in the United States,”
pp. 278-307.
Supplemental Readings
Brooks, Arthur C., “Public subsidies and charitable giving: crowding out, crowding in,
or both?”, Journal of Policy Analysis and Management, Vol. 19. No. 3, 2000, pp. 451464.
WEEK 7
Class 13
Mon 14 May
Lecture: Public and private support for the arts, cont.
Required Readings
O’Hare, Michael and Alan L. Feld, “Indirect aid to the arts,” Annals of the American
Academy of Political and Social Science, Vol. 471, January 1984, pp. 132-143.
Grantmakers in the Arts, “Vital signs: Arts funding in the current economy,” GIAreader,
Vol. 20, No. 2, Summer 2009.
Supplemental Readings
Cobb, Nina Kressner, “The new philanthropy: its impact on funding arts and culture,”
Journal of Arts Management, Law and Society, Vol. 32, No. 2, Summer 2002, pp. 125143.
Americans for the Arts and The Ohio State University, “National and local profiles of
cultural support: summary report,” 5 October 2002.
Class 14
Weds 16 May
Lecture: The arts and economic development: economic impact studies
Required Readings
Stynes, Daniel J., “Guidelines for measuring visitor spending,” Michigan State
Department of Park, Recreation and Tourism Resources, 1998.
LA County Economic Development Corporation, Report on the Creative Economy of the
Los Angeles Region, commissioned by the OTIS College of Art and Design, November
2009.
Supplemental Readings
Madden, Christopher, “Using ‘economic’ impact studies in arts and cultural advocacy,”
Media International Australia Incorporating Culture and Policy, No. 98, February
2001.
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Prof J. Lowell
Spring 2012
WEEK 8
Class 15
Mon 21 May
Lecture: The arts and economic development: doubts about economic impact studies
Required Readings
Seaman, Bruce A., “The supply constraint problem in economic impact analysis: an
arts/sports disparity,” Georgia State University, Andrew Young School of Policy
Studies working paper, 2006.
Supplemental Readings
Guetzkow, Joshua, “How the arts impact communities: an introduction to the literature
on arts impact studies,” Princeton University Center for Arts and Cultural Policy
Studies Working Paper No. 20, 7-8 June 2002.
Class 16
Weds 23 May
Lecture: Valuing the arts
Required Readings
Thompson, Eric, Mark Berger, Glenn Blomquist, and Steven Allen, “Valuing the arts: a
contigent valuation approach,” Journal of Cultural Economics, Vol. 26, 2002, pp. 87113.
Brooks, Arthur C., “Are culture wars inevitable in the arts?” Center for Arts and Culture
Cultural Comment, March 2005.
Supplemental Readings
Seaman, Bruce A., “The Relationship Among Regional Economic Impact Models:
Contingent Valuation Versus Economic Impact in the Case of Cultural Assets,”
Andrew Young School of Policy Studies, Georgia State University Working Paper No.
07-05, 2006.
Pettit, Becky and Paul J. DiMaggio, “Public opinion and political vulnerability: why has
the National Endowment for the Arts been such a popular target?” Princeton
University Center for Arts and Cultural Policy Studies Working Paper No. 7, January
1999.
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Prof J. Lowell
Spring 2012
WEEK 9
Class 17
Mon 28 May
MEMORIAL DAY HOLIDAY
Class 18
Weds 30 May
To Be Determined—Presentations?
WEEK 10
Class 19
Mon 4 June
PRESENTATIONS OF CLASS PROJECT
Class 20
Weds 6 June
Last class
PRESENTATIONS OF CLASS PROJECT
Final Exam handed out
The Final Exam will be an open-book, take-home exam. It is due no later than NOON
on Monday, 11 June. Late exams will receive no credit.
The final may be delivered by hand to my office, or sent to me via e-mail as a Word
document.
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