preview

Cultural Economics : Theory, Subject Code Cc4111

Better Essays

Cultural Economics: theory Subject code CC4111 Academic year 2014 – 2015, Term 1. Lecturer(s): Dr. Filip Vermeylen Dr. Erwin Dekker Final Essay Museums pricing Michailidou Maria-Eleni 410683 07/12/2014 To charge or not to charge? Which are the different price setting mechanisms used by museums and how do they differ when they belong to the public sector? In which ways could museums increase their revenues? Museums are important institutions that aim in the preservation and exhibition of heritage for the public benefit. However, since they are part of the economy, they are often subject to “dynamic change” (Johnson, 2003, p. 317). Due to the changes of the last few decades, the sector has engaged into several …show more content…

Museum managers should carefully examine individually all aspects of a museum’s function in order to answer this dilemma. They must take into account the situation of each museum in terms of wealth and popularity, its target group (type of visitor it attracts), the collection as well as its location (Bailey, Falconer, Foley, McPherson, & Graham, 2007). Several authors have used the marginal costs theory in order to argue in favor of free admission to museums. The fixed costs for museums are so high in comparison to the variable costs that the marginal cost theory suggests that the actual costs for every additional visitor are minimal. Therefore, they may as well establish a free entrance since it does not really affect them (Dickenson, 1993). On the other hand, according to Frey and Meier, although econometricians have estimated demand for museums to be price inelastic, there is not enough evidence to support it since most researches are based on cases of one or two museums (Frey & Meier, 2006). There are cases of course where entrance revenues are crucial for the operation, especially when it comes to very popular institutions such as zoos, museums of science and aquariums where the range of visitors reaches one million (Dickenson, 1993). Charging can also be questioned for social and political reasons. Dickenson argues that charging serves as a motivation for people that respect heritage as well as a discouragement for the indifferent ones

Get Access