Baumol Effect Is A Blessing, Not A Disease

by:

Joe Patti

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

by:

Joe Patti

Hat tip to Artsjournal.com 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.

Why (And How) Are You Apologizing?

by:

Joe Patti

Seth Godin recently wrote a lengthy post on the subject of apologies.  He addresses the issue of entities providing insufficient apologies but also the expectation of restitution which is out of proportion with the offense.  Since good customer service is one of the primary attributes that contribute to the success of non-profit arts organizations, it is obviously worth considering what he has to say.

We can start by asking, “what is this apology for?” What does the person need from us?

  • To be seen
  • Compensation
  • Punishment for the transgressor
  • Stopping the damage

The first category is the one that most demands humanity, and it’s also the most common. A form letter from a company does not make us feel seen. Neither does an automated text from an airline when a plane is late. One reason that malpractice victims sue is that surgeons sometimes have trouble with a genuine apology.

He says when people don’t feel they have been seen, it leads to demands for the other three elements: Compensation to make good on a real or perceived loss; Punishment which allows the victim to feel the transgressor has also suffered; Stopping the damage so that no one else suffers the same harm in the future.

These other three categories can be executed in a constructive manner, though it is easy for punishment to turn into a recurring cycle of damage.

However, Godin says some psychological and social expectations related to compensation, punishment and stopping the damage can have a destructive result.

Compounding these totally different sorts of apologies is the very industrial idea of winning. Victims have been sold that it’s not enough that your compensation is merely helpful, but it has to be the most. That you won the biggest judgment in history. That the transgressor isn’t simply going to jail, but is going to jail forever, far away, in solitary confinement. We’ve all ended up in a place where one of the ways to feel seen is to also feel like you came in first place compared to others.

Though it may not prevent someone who seeks to win to the detriment of others, Godin says the best way for an organization to address damage is to train and empower front line staff to provide an empathetic response.

The challenge that organizations have is that they haven’t trained, rewarded or permitted their frontline employees to exert emotional labor to create human connection when it’s most needed.

[…]

The alternative is to choose to contribute to connection by actually apologizing. Apologizing not to make the person go away, but because they have feelings, and you can do something for them. Apologizing with time and direct contact, and following it up by actually changing the defective systems that caused the problem.

“Yikes, I’m sorry you missed your flight–I really wish that hadn’t happened. The next flight is in an hour, but that’s probably going to ruin your entire trip. Are you headed on vacation?”

Door To Seat As Important As The Quality Of The Event

by:

Joe Patti

All right. A little gripe time here. I have been nursing a sense of dissatisfaction for a couple weeks now but it sort of came to a head when I saw the title of Ceci Dadisman’s recent post, “Unpopular Opinion: It is our job to remove barriers to engagement.” She talks about removing perceptual barriers, but the source of my dissatisfaction is related to physical barriers.

I had submitted a grant this past Spring and recently had an opportunity to listen to the panelists discuss our application over the internet. There were a number of criticisms which I can concede as deficiencies with our application. There were other places where panelists misread what we wrote, but I can understand that given the number of applications they read. (Though I did panic momentarily as I scurried to find the document we submitted.)

What annoyed me was a criticism of our response to a question about a recent program that had an impact on the community. Being new to my position, I had spoke with staff, board members, volunteers and long attending audience members about what events had made an impact. This resulted in some good conversations about the distinction between impactful experiences and popular, well-attended experiences. I wrote our grant response about the performance program that many people had mentioned had an unexpected impact.

Then, because I had the room, I mentioned that something that can’t be discounted was the impact a renovation to the physical spaces of the facility had on the community. I discussed the fact that it is very easy for people to make the decision to stay at home and every element associated with going to a live event from restaurants, to babysitters, to parking must align conveniently for people to make the decision to go out.

I went on to talk about the pre-renovation experience where the line to the women’s restroom in our facility was so long that it extended out the front door and the men’s room often had to be closed to men in order to accommodate women. Still intermission would need to be extended. I spoke about the restroom renovation garnering the most effusive response from people. I explained that as amusing as it might be to think toilets are the most popular part of a renovation, this represented a very real impact on the community perception of the venue and shouldn’t be dismissed especially given most attendance decisions and arrangements are predominantly made by women.

My mention of the impact of the renovations met with some criticism by the panel. What annoyed me most about this was that the panel was comprised of artists or those associated with arts entities drawn from throughout the state.  I could understand if panelists drawn from the general public didn’t understand the importance of the physical environment in arts and cultural experiences.

I intentionally wrote about the importance of environment in order to introduce the idea to funders and policymakers.  What I hadn’t expected was a dismissal by arts and cultural practitioners.

As Ceci mentions in her article, as insiders, arts and cultural practitioners can be blind to some of the perceptual barriers we erect around and experience.  I guess there also needs to be more frequent mention of the influence tangible physical elements play on the experience, just to be aware of these factors even if you can’t exert control over them.