Advanced Economic Aspects of Cultural Industries (CC3105)
Summary
Summary Advanced Economic Aspects of Cultural Industries READINGS (BA 3, Term 3)
115 views 4 purchases
Course
Advanced Economic Aspects of Cultural Industries (CC3105)
Institution
Erasmus Universiteit Rotterdam (EUR)
Book
A Textbook of Cultural Economics
Readings summaries for the course Advanced Economic Aspects of Cultural Industries tutorial notes. Includes the following chapters:
Textbook of Cultural Economics (Towse): chapters 1, 2, 3, 5, 6, 14
A Handbook of Cultural Economics (Towse): chapters 16 - Creative economy, 17 - Creative industries...
International Bachelor of Arts and Culture Studies
Advanced Economic Aspects of Cultural Industries (CC3105)
All documents for this subject (2)
Seller
Follow
javondr
Reviews received
Content preview
Introduction to CI
Chapter 1: Introduction to Cultural Economics
What are economics & cultural economics?
- Use of economic principles to analyse problems and empirical evidence to answer them
- Cultural economics applies this analysis to cultural sector
- Adapting economics to take into account the specificities of the cultural sector
- Economics studies reaction of people and organisations to incentives (rewards, benefits)
and disincentives these reactions coordinated through marketplace
- Market are both real and virtual
- Opportunity cost - when you spend money on one thing, you can’t spend them on another
anymore choices
- Governments also make choices public finance – CE uses ideas from it
- Social welfare – greatest happiness for the greatest number
- Welfare economics – rationalizing state intervention in the market mechanisms
- Positive X normative analysis
positive can be tested by evidence
normative – matter of opinion, value judgement
- Critique of economics – it is impossible to avoid value judgement; especially in welfare
economics
Examples: people aren’t always rational in arts, they are influenced by society; sovereign
consumers who best understand their needs
- Cultural industries regarded as dynamic and important sources of economic growth
means of economic development
A Brief History of Cultural Economics
- Baumol & Bowen – book on the performing arts
- Empirical study of finance, costs and prices in theatre, orchestras, opera and ballet;
payments and employment of performing artists in the US
- Cost disease – ever increasing costs of producing the performing arts (it’s a labour intensive
sector; costs rise due to external and unstoppable economic factors?)
- Rising costs of supplying the arts would mean prices having to be increased reduction of
demand shortfall of revenues from sales of tickets = earnings gap
- Earnings gap need for subsidy
CE and Creative Industries
- Term CI comes from sociology (1930’s – mass production changing nature of art)
- Late 1990’s and early 2000’s – rise of ‘creative industries’ (Caves, UK Department for Culture,
Media and Sport)
- Caves – creators of work must collaborate
, - UCMS – CI are based on individual creativity, skill and talent; they have a potential to create
wealth and jobs through developing and exploiting intellectual property
- Movement into the IP direction with WIPO and UNCTAD; TRIPS
Market Forces in CI
- Commercialised culture relies on market forces
- Economists – consumer sovereignty; consumers can best decide what they want
- Some other people – consumers are not well informed enough (the peasants need expert
judgement) or not WTP art cannot be sustained through the market
Neoclassical economics
- Individual producers and consumers rationally calculate all alternatives when making choices
and have sufficient information when doing so
- Producers and consumers are able to anticipate and allow for future income and
expenditures
- S and D respond to prices and to competition, and prices therefore act as signals as to what
to produce
Other types of economics
Macroeconomics: aggregate economics variables (national income, employment)
Microeconomics: economic behavior of individual producer and consumer
Welfare economics: analyses conditions for achieving maximum social efficiency from the
use of resources in every market in the economy; analyzing market failure
cost-benefit analysis of long-term investment (theater, museum building)
contingent valuation (people’s subjective estimates of the value they place on projects)
Public choice theory: economic approach to political decision making
principal-agent analysis (principal – voter or taxpayer)
asymmetric information (voters and politicians less info than the enterprises)
Transaction cost economics: costs of using the market economy (costs of making deals,
finding information, enforcing contracts, etc.)
Property rights approach (contract theory and analysis) – copyright, intellectual property
Creative Economy
- 2000-05: growth of international trade in creative goods and services at 8,7% per year
- Creative economy a central concept in policy discussion
- Creative economy = evolving concept based on creative assets potentially generating
economic growth and development; at its heart – creative industries
it can foster income generation, job creation, export earnings while promoting social
inclusion and cultural diversity
econ, culture and social aspects with tech (IP, tourism objectives)
knowledge-based
- Sectors such as software, design, marketing increasingly integrated with arts
, - Emphasis on institution, local increasing returns to scale
- Cultural clusters
Example: Dalton, Georgia – someone started a carped production there; other carpet companies
followed because there was trained supply of labour and infrastructure growing population
money Dalton more attractive to live
- Other clusters in other parts of the world (Hollywood, reggae in Jamaica) increasing
returns to scale
- Cultural policy therefore less separate from economic policy (incl urban, edu, transport
policy)
- Good urban policies may be some of the best cultural policies
- Subsidy for arts is thus less likely to be discussed in ‘stand-alone’ terms, but more as a part of
a cultural network (nourishing a whole area)
- Production & generation of ideas – more likely non-rival in consumption (one person can
borrow an idea without restricting the ability of others to use the same idea)
- Production of ideas – more social then firm-specific
- Creative arts as a development engine used in poorer countries; which develop cultural
sectors by expressing their histories and identities
- Economic value embodies in IP rights copyright and patent laws more contentious
these favour corporate interests rather than consumer interests
- Preventing human capital from fleeing – important (after WWII, many European cultural
centres are no longer)
Creative Industries
- Combination of industrial-scale production with creative content
- Commercialisation – due to development of technologies
- Creativity as engine of wealth creation; rather than the other way around
- Commercialization via intl trade (globalisation) has led to homogeneity
- Macroeconomic measurement of the economic contribution of CI + application of
microeconomic theory of production and supply (theory of the firm, contract theory,
transaction cost economics)
ECONOMIC CHARACTERISTICS OF CI
- CI share features of other knowledge or information goods producers
high fixed cost of producing the original master copy
very low marginal cost of making copies
Characteristic of a natural monopoly subsidy or price regulation is in order
- Risky products, subject to radically uncertain reception high failure rate (adds to fixed
costs)
- Entry barriers – high initial capital requirements for production and global marketing; IP
INDUSTRIAL ORGANISATION & COPYRIGHT
- Flexible specialization – freelancing on short-term contracts
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller javondr. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $6.85. You're not tied to anything after your purchase.
