Studying "Sponsored Goods" in Cultural Sector Symptoms and Consequences of Baumol's Cost Disease

Abstract

The present research is the first part of econometric study of the so called sponsored goods and looks at one of the most common types of such goods namely art products created by theaters, concert organizations and museums. The aim of the paper is to analyse the performance of Russian art organizations to find out to what extend the conditions of their functioning in post Soviet times under the development of market economy, democratization of leisure and changes in consumer preferences influence their economic results. Could Russian theaters, museums and concert organizations be self- sufficient in market economy established in Russian in 1991-2010?The set up task determined the object of the study and the statistical data to be used-40 years time series performance indicators that include equal time intervals-1971-1990 for performing arts organizations and 1991-2010-for theaters, concert organizations and museums. The specifics of calculations presented in the article result from the very approach to the testing of cost disease. Its essence is to reveal the symptoms of this disease in art organizations taken as an element of economy as a whole rather than only as a part of cultural activities. Accordingly a new method of diagnostics of the cost disease is suggested that is based on development of specific indexes measuring the lag of labor productivity, advancing dynamics of wages and priority growth in prices for tickets in relation to the corresponding indexes of macroeconomic dynamics as well as determination of cost disease consequences-the deficit of income of providers of cultural (art) goods. The implementation of such an approach allowed to construct three-dimensional space which coordinates describe the dynamics of performance results of art organizations.