75965 - Economics of Arts and Culture

Learning outcomes

The course will take a wide-ranging perspective on the economics of arts and literature, and discuss the broader role of 'culture' in economics. 

Cultural activities share some basic (yet, not exhaustive) characteristics. They all involve forms of creativity in their production. They focus on the creation of symbolic meaning. Their output usually includes forms of intellectual property. 

The aim of the course is to provide the students with the fundamental tools to think critically and independently about the main economic aspects of cultural resources, including the structure of the markets, the determinants of supply and demand, the assessment of values and prices, and the tools for economic policy usually applied to the cultural sector.

Course contents

The lessons of the course will deal with the following topics of economic analysis:

The organization of economic market processes and the role of creative processes

Creativity: is it the outcome of a decision-making process? Does it arise from a process that is not based on rational choices?

Economic value and cultural value: how can we systematically think about the economic implications of 'cultural' activities?

The organization of value chains: are cultural activities different from the others?

Human capital, physical capital and cultural capital: what are the differences between these three 'factors of production'?

Determination of supply and demand: a comparison between the economic sectors related to cultural activities and the other 'standard' economic sectors.

Baumol's cost disease: what it is and why it is no longer relevant for understanding cultural phenomena.

Setting the entry price for a museum: why are the pricing policies linked to this activity different from those that characterize other economic sectors?

Readings/Bibliography

The reference text for the course consists in a book manuscript that the teacher will share on the online spaces of the course.The exam will focus on all the chapters of the aforementioned manuscript. It should be noted that this material is currently being prepared and will be made available at the beginning of the course.

A set of slides on the course topics will also be made available to the students.

Teaching methods

There will be a series of lectures organized over a short period of time. Student participation will be strongly encouraged as there will be a focus on interaction between the students and the teacher. 

Assessment methods

Type of exam:

The book adopted from the 2019-2020 academic year presents concepts and analysis tools that can be applied - in a general way - in the economic analysis of specific cases. Therefore, unlike in previous years, during the exam you will be asked to solve a 'case study' in an 'open book' mode.

What does all this mean?

* The teacher will present a hypothetical situation that has economic implications and that can occur in the cultural field. General questions will also be formulated.

* Based on the conceptual tools presented in the book and on all the other relevant information sources, the student will discuss the possible answers to the questions.

* In short, this is about combining your creativity with an understanding of the topics covered in the book. The knowledge acquired from studying the book will be used in the discussion and analysis of a general case.

Question 1: does this imply that you can avoid studying the book for the exam? No. While formulating the solution to the case study, the student should refer to the ideas, concepts, theories and other elements presented in the book.

Question 2: during the exam, can we also make reference to elements - concepts, theories, pictures, tables etc - not contained in the textbook? Yes: this an 'open book' exam. Obviously the teacher will build the case study starting from what is discussed in the book. Therefore, the use of additional elements present in other sources makes sense only if it is adequately motivated and explained.

An example of the text for the written exam:

The XY museum receives public contributions from MIBACT for the organization of art exhibitions. All the economic costs related to the museum's activity are covered by the contributions of MIBACT. The XY museum is located in a town where also the AB museum is located. The AB museum offers the XY museum the opportunity to organize art exhibitions jointly. The director of the XY museum decides to evaluate the opportunities that could emerge from this proposal.

* What economic problems arise in the assessment that the XY director must make? What economic concepts can be applied in this case?

* Under what economic hypotheses can the director of XY be led to decide in a negative sense regarding the possibility of organizing joint events with the AB museum?

* Can information asymmetry play a relevant role in the choice problem? Why? In which way? Under what conditions?

Teacher's note in addition to the exam text example: it should be clear that fairly different types of answers can be equally acceptable. This means that it becomes important to explain the logical reasons on which the answers are built. For example, in formulating the answers, a student is free to introduce hypotheses of different nature. In this sense, it becomes imperative to specify and clearly explain which hypotheses are introduced. In our previous example, the following could be argued: IF the stock of artworks available to AB leads to a service offering that constitutes a substitute for what is offered by the XY museum, then XY may benefit from the organization of joint events. This statement would find logical ground only if it was accompanied by a clear motivation. For example, it could be argued that the integration of the activities of the two museums would lead to the elimination of market competition in the interest of both museum institutions.

Practical arrangements related to online exam sessions:

* at the beginning of the exam session, the teacher uploads the exam text on the chat prepared for the exam itself

* it is requested to elaborate the solution to the case study in an MS-Word file

* each page of the file must be enumerated

* each page of the file must include name, surname, serial number, day of the exam

* the complete MS-Word file must be converted into a PDF file

* the final PDF file is uploaded by the student to the exam session chat on Microsoft Teams

* students will have 3 hours to complete the exam paper, starting from the moment the exam text is received: the delivery time corresponds to the loading time in Microsoft Teams

Additional considerations:

* students are allowed to use any source of information in carrying out the open-book exam

* students are allowed to report graphs or tables that are relevant for the formulation of the answers

* if reference is made to a source, the sources must be cited as clearly, precisely (and verifiable by the teacher) as possible:

- author,

- title of publication,

- table or graph number if needed,

- number of papage of the publication containing the original text that is cited

* there are no page limits for the exam paper. However, all the students should keep in mind that it is important to communicate one's ideas in an efficient way

* for any other information, please contact the teacher.

Evaluation criteria:

An exhaustive discussion of the case study together with a clear understanding of the topics of study, clearcut evidence of critical jdugement and logically-coherent thinking, along with the use of language appropriate to the disciplinary context will be evaluated with marks in the range of 27-30 with honors.

An exam paper that denotes an adequate ability to identify the relevant theoretical analysis tools, the use of language expressions appropriate to the disciplinary context and evidence of partially satisfactory logical skills will be assessed with a score within the range 21-26.

Evidence of a limited understanding of the analysis tools presented during the course, use of inadequate written expressions and logical skills will be assessed with a score in the range 18-20.

Lack of evidence of understanding of the study material combined with the use of inadequate expressions and logical skills will be assessed with insufficient marks.

Teaching tools

The teacher will made available to the students a set of slides. These will be tailored-made to the ongoing discussion and interaction developed during the lectures. 

Office hours

See the website of Paolo Zagaglia