Why are concert tickets getting pricier? Students delve into the concept of cost disease in the art world.

The room falls silent as lecturer Ellen Loots begins. Each week, students analyse the economic principles at play in the art sector. This time, the focus is on performing arts.

On the screen behind the lecturer, posters of three different music performances of a Beethoven string quartet are displayed: one from the 1920s, one from the 1970s, and one from the 2020s. Using these posters, she explains the concept of cost disease in the art sector.

Economist William Baumol, who coined the term, argues that the cost increase in the art sector outpaces that of the industrial sector. In other words, tickets for theatre performances or concerts have increased in price at a faster rate than a piece of clothing.

This is due to the stagnation of labour productivity in the arts sector.  “For the Beethoven Quartet, you always need four people on stage, both in the twenties and now”, lecturer Loots explains. “Compare that to automated clothing production. Producing a T-shirt now takes maybe a tenth of the time it would have taken twenty years ago.” On the other hand, labour costs in the arts are rising at the same rate as those in the industrial sector. “Otherwise, people will no longer find the work appealing and leave the art sector”, Loots says.

The combination of rising labour costs and stagnant productivity is the cause of cost disease. The result: art is becoming increasingly expensive.

Lecturer Loots’ explanation certainly strikes a chord with student Hannah. She is an artist herself: she’s a dancer, actor and choreographer. “I often hear people complain about how expensive the admission for art performances has become. They don’t realise that a lot of people have put a lot of time and effort into creating those performances. Also, costs for things like the venue or technology are on the rise”, she says. And that, while wages in the art sector are very low, she adds. “I myself never really get paid well for my performances. Sometimes, it actually costs me money to perform.  That’s why artists often have multiple jobs to make ends meet.”

The lecture is certainly interesting, says student Isabel. She plays keyboard in an indie band and performs regularly. “As a musician, I don’t have to worry about the business side of my work because we have a manager who handles everything. But it’s still useful to know why certain economic decisions are made”, she says. Hannah agrees. “On stage, people don’t discuss the business side of the art world. Artists just want to focus on creating, but whether we like it or not, art is closely intertwined with economics.”

Student Rohan is pleasantly surprised with the lecture, he admits. “I took Economics last year and didn’t enjoy it at all. So when I saw this course, it didn’t appeal to me at first.”  But it turned out to be an engaging lecture, he says. “Economics can be challenging, but the lecturer always explains things clearly. She’s very patient and repeats her explanations if needed. Her voice is also very calming.”