Thursday, March 19, 2009

Public and private responses of culture to recession 

A couple of weeks ago the Minnesota Timberwolves announced a deal: For the 2009-2010 season tickets would cost less. The level of price discrimination between the upper and lower decks increased. Moreover, if you buy season tickets and you lose your job, they'll refund the remainder of the season.

As Rick Reilly points out, it does mean you have to watch the Timberwolves.

But at least the T'wolves understand a demand curve: If the demand for your product falls because, say, your best player blew out his knee, or the firing of Matt Millen leaves your GM the worst in professional sports, it's possible the profit-maximizing price for your product fell as well. They might not know Lebron from Love, but seems Wolves management understands dollars.

Not so the city of Chicago, who can't seem to figure out that recessions might be good for museums (h/t: WSJ BotW):

Chicago would cut off the free water spigot and other public subsidies to museums that charge more than $10 for admission, under a measure proposed Wednesday in response to the Art Institute's 50 percent hike in its admission fee.

The increase approved last week by the Chicago Park District board would raise the Art Institute's admission fee from $12 a person to $18, a "remarkable jump," according to Ald. Edward M. Burke (14th), chairman of the City Council's Finance Committee.

Less than three years ago, the Art Institute was still one of the few big city museums with no mandatory admission fee. Museum patrons were asked to pay a "suggested" fee. But those who refused were not turned away.

"A family of four going to the museum would have to pay $72, plus parking, plus a Coke or a candy bar. It's becoming impossible for Chicago citizens to take advantage of these cultural institutions," Burke said.

Noting that the Art Institute received a $6.6 million Park District subsidy last year, Burke said, "I know their endowment has probably suffered with the downturn in the economy. But that's no excuse to stick it to the hard-working men and women of Chicago who are already paying taxes that subsidize these institutions who might like to take their kids to see these great treasures."

The city is mostly interested in negotiating for free dates from the museum. But the museum has already given away all its admission revenue from February after experiencing increased attendance last year. The Institute had or has a free admission day once a week. Like the T'Wolves, the Art Institute makes available high-priced tickets for those willing to pay, and has historically maintained free days (no doubt in part to its attractiveness to would-be contributors or funds and art exhibits.)

Those who do not have the money have options of other cultural activities which are free (such as the museum at Northwestern, or the Chicago Cultural Center.) Nobody makes someone go to the Art Institute, but someone makes it pay for water and maintains a monopoly on its provision. It is all pandering, of the same kind as is occurring with AIG, proven by the last line of the Alderman's outrage:
"It's one thing to charge $18 for somebody who's coming here from New Orleans or New York or San Francisco. It's something entirely different . . . to charge $18 to a taxpayer who lives in Chicago, who�s already paying taxes that subsidize these institutions.�
And it's entirely another thing, Alderman, to coerce money from Chicagoans to give to a museum when they may lose their job -- they won't get their property taxes back -- all so that you can grandstand to the media about providing access to art.

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