Baumol Effect Is A Blessing, Not A Disease

Economist Alex Tabarrok recently made an interesting post on Baumol’s cost disease.  The concept usually explained by noting that since it doesn’t take any less time to perform a string quartet than it did when Beethoven wrote it, orchestras have no way to save money by taking advantage of advances in productivity and efficiency.

Tabarrok comes at it from the perspective that it is only more expensive to perform a string quartet now because productivity has increased in other industries.

The Baumol effect is easy to explain but difficult to grasp.


Growth in average labor productivity has a surprising implication: it makes the output of slow productivity-growth sectors (relatively) more expensive. In 1826, the average wage of $1.14 meant that the 2.66 hours needed to produce a performance of Beethoven’s String Quartet No. 14 had an opportunity cost of just $3.02. At a wage of $26.44, the 2.66 hours of labor in music production had an opportunity cost of $70.33. Thus, in 2010 it was 23 times (70.33/3.02) more expensive to produce a performance of Beethoven’s String Quartet No. 14 than in 1826.


The focus on relative prices tells us that the cost disease is misnamed. The cost disease is not a disease but a blessing. To be sure, it would be better if productivity increased in all industries, but that is just to say that more is better. There is nothing negative about productivity growth, even if it is unbalanced.

If that is a little hard to understand, he uses a more relatable example to point out that “…over time prices have very little connection to affordability.”

If the price of the same can of soup is higher at Wegmans than at Walmart we understand that soup is more affordable at Walmart. But if the price of the same can of soup is higher today than in the past it doesn’t imply that soup was more affordable in the past, even if we have done all the right corrections for inflation.

So just because a ticket costs more than it did years ago, doesn’t mean it is necessarily less affordable. Granted, it may still be a bit more difficult to get the funds together than in the past. I have had people tell me they were able to see Broadway shows for $15 at one time. While I suspect they may be mis-remembering how much of their weekly salary that $15 represented, it wouldn’t surprise me to learn that tickets today are a greater portion of the weekly salary for that same job today. The production values are likely a lot higher than people saw when they were paying $15 so the ratio of value to money spent is probably fairly good.

Based on Tabarrok’s explanation, the concept that certain artistic expressions are fated to be an increasing burden on society because they can’t be executed with greater efficiency is not valid. Productivity growth in other areas provides the capacity to support those artistic expressions.

When Ignoring “Show, Don’t Tell” Is The Best Option

Hat tip to who listed an article from The Conversation about how your phone can interrupt a concert experience. Author Christine Van Winkle discusses research she and her team conducted at outdoor summer music festivals over the course of five years.

Because the research was conducted at festivals, the detrimental effects of using a phone at a concert was more focused on the quality of the user experience rather than the impact on those around the person. With factors like heat, cold, rain, bugs and people bumping into you, the glow of a phone screen isn’t as big a distraction to others as it can be in a concert hall.

As a result, the research is potentially more effective at persuading people not to use phones because the message is about why they aren’t having the best experience rather than that they are causing others to have a poor experience.

As you might imagine, some of those participating in the study intentionally left their phones at home and didn’t miss them. Others were discomforted without their phones or by the failure of the phone battery.

It is interesting to note that the anti-social behavior of peering over your phone in a group can create social pressure on others to use their phone in a similar manner:

Festival goers described sitting with friends who were texting or searching on their phones and suddenly they felt compelled to use their phone as well. This mirroring behaviour is a well known response people have in social situations.

The idea that phone use is “infectious” may provide some incentive to arts entities to prohibit the use of phone. But it isn’t just the performers and venues which may be dissatisfied with this type of phone use, the practice can lead to disappointment for the phone user as well.

The research shows that when we decide to use our phones to check work email, to check up on the kids or any other activities that have nothing to do with the festival, our satisfaction with the experience goes down.

However, Van Winkle’s research shows using the phone for activities related to the experience doesn’t impact satisfaction either positively or negatively. While the outcome is currently neutral, it may be worthwhile for artists and organizations to think about creating content that augments the experience. The lack of a positive sense of satisfaction may just reflect the fact that most activity related content mentioned in the study is of neutral value like schedules and maps.

When we do use our devices at festivals it doesn’t affect our satisfaction with the event if we are using our phones for festival-related activities like looking at the festival schedule, the venue map or even texting to meet up with friends who are joining us.

Van Winkle offers some tips for phone use, most of which involve limiting your interactions with the phone and the amount of content you receive from others. What was most interesting to me was her suggestion that offering too much information can actually diminish the number of opportunities you have to relate your experience to others. Essentially, contrary to all prior storytelling advice, this would be the one time to tell, don’t show. (my emphasis)

Wait to post. It’s fun to share your experience with your extended network but consider waiting until you return home. Sharing the memories captured on your phone after the experience gives you an opportunity to reflect on the day and prevents you from being distracted by other people’s posts while you are at the event.

Consider not posting any images of your experience to social media at all — you might find it leads to more conversations with people when they ask about your weekend or summer. Often, once people have seen your post they assume they already know how your weekend was, robbing you of the opportunity to share your experience with them.

Dark Side of Word of Mouth

I participated in a work session for the development of a cultural masterplan for the county today. My table was focused on ideas to attract creative professionals to the community. There was a pretty good cross-section of arts disciplines plus a couple people from the general community involved in the discussion so the quality of the conversation was surprising informative.

Some of the conversation revolved around the lack of infrastructure to ensure a consistent transition for creatives through all stages of their development. People could gain education up to a certain point, then had to leave to continue their education, but could return because there were some opportunities suited to that education. There was discussion about how to fill in that gap with things like mentoring or apprenticeships.

There was a similar conversation related to the frequency of film productions in town who had to leave to do editing and scoring elsewhere because there were no facilities for that locally. Yet there are a number of highly skills musicians capable of contributing to film/tv/video game scores. There are two product that might be of mutual benefit to each other, but nothing to bind them together.

As much as discussions like that raised my awareness about resources, there were some parts of the conversation with which I was all too familiar. A big impediment to attracting new creatives to the community was the lack of value placed on the artistic product.

People want musicians to play for free. People want to pass very little for lessons, apparently unaware of the rent and material costs associated with teaching visual arts disciplines.  Local people view the work on display at the major ceramics show as overpriced while people from out of town swoon at getting great work so cheaply.

Something that did catch my attention was mention that it is apparently difficult for new arts schools to make people aware of their existence due to the decline of traditional media channels and the way social media like Facebook has prioritized information from friends over ad content and news.

Basically, in a place where there is good word of mouth advising people where to send their kids for lessons, it is difficult for new players to break in.  From what I was told, the person trying to open a new school found that those yard signs people put up during elections were pretty effective. Unfortunately, zoning laws prevented where they could be placed and for how long. There are 3-4 existing schools in the same category and they apparently all said they don’t advertise and depend solely on word of mouth to get business.

Now theoretically, some good search engine optimization should provide the new kid in town with some exposure for anyone randomly searching for lessons. But sometimes even new residents try to tap into the local reputation network as they get themselves set up rather than doing general searches. One woman mentioned she was a long time resident of the community, but a friend just moving into the area told her where she should be looking for schools and services for her family. The newcomer had been investing a lot of effort soliciting word of mouth recommendations.

Learning this was a small peek into the dark side of word of mouth. I haven’t thought about it and paid attention to behavior enough to make any pronouncements about implications for arts and culture in general. If this is a reflection of what is happening in many communities, then a dependence on word of both in the context of a national fracturing along socio-political lines could be quite concerning. But if this is a dominant factor in my community and only associated with extra-curricular activities, then it probably isn’t a big deal.

It still may be worth paying attention to how reputation networks are operating in your communities.

Big Kids Play With Bigger Blocks

I saw an article on Gizmodo in the last couple weeks about scientists who designed 3,900 pound concrete structures that can be moved by a single person. As I read about cuts to arts in schools and the elimination of recess, I figured there was a need to toss out an example in support of unstructured free time.

There are a bunch of fun to watch GIFs on the article’s page, but here is a video of what they did:

As some of the commenters to the article point out, yes it is one thing to roll pre-cast objects over a concrete floor and another to quarry stone to transport over muddy ground. So while this may not entirely explain how Stonehenge, the pyramids and the Moai of Rapa Nui were created, there is some proof of concept upon which to base the design of structures to be used in emergency situations.

From my point of view, the development of the objects people are moving around have some basis in playing with Legos or other building materials and may move on to increasingly practical applications. I am sure that at some point in the past, at least one person who contributed to the design of the project was afforded the time to juggle things around in their hands to see how it all fit together and explore the properties of what they made were. Leaps of imagination and experimentation occurred until someone made a video of people rocking two ton chunks of concrete around with a light push.

Time to play with the simplest objects can result in new insights. But that is difficult to accomplish if you grow up thinking there is no value in such activities, exploration and curiosity.

This may not be the first time you heard about someone gaining insight into ancient construction techniques. A retired construction worker in Michigan demonstrated some much more compelling theories about ancient construction techniques some years ago. (I couldn’t find any better quality video than this.) He employed the same design elements of rounded/beveled edges to great effect, especially considering he was moving blocks across less prepared surfaces and using tools more readily available to anyone.

Though to use his techniques in an emergency situation, you would need much more knowledge to construct barriers and structures than with the prefabricated concrete objects in the first video.

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