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3. Cultural activities and goods
3.1. Special features
Cultural experiences can be aesthetic, touching, memorable and mind baffling. They may even make
people think differently about themselves, life or the world. In contrast, instant entertainment may be fun
but the touching and baffling effects fade away quickly. Cultural experiences are also normal economic
goods with substitutes (sport, family dinners) and complements (newspapers, magazines, transport, etc.).
Some cultural goods such as pay-TV and visits to the performing arts or museums are rival goods. One
can then internalise all benefits, so prices reflect true costs and the market functions. If congestion costs
are large, non-rival may turn into rival cultural goods. For example, noisy, uninterested people attending
an open-air concert destroy enjoyment of interested art lovers. Classic examples where the marginal cost
of adding one more consumer is zero are bridges and lighthouses, but broadcasts of radio or TV and
monumental buildings can also be non-rival. Though jamming can exclude people from broadcasts, it
does not make economic sense. Non-rival goods thus lead to free riders as nobody wants to pay. This
may justify subsidies for open-channel radio and television and maintaining heritage.
Maddison and Foster (2003) argue that free admissions for the British Museum are harmful due to
congestion, especially as exhibits are unique and not reproducible. Using valuation data before realisation
of the Great Court by Norman Foster, they estimate that the congestion cost imposed by the marginal
visitor to the British Museum is eight pounds. This seems high, since as one should also add other
marginal costs of admission (security, maintenance, cleaning, etc.). The pure public good case for
museums is thus hard to make. Some rival goods suffer from non-excludability, since it is not feasible to
exclude those who do not pay. Think of restoration of a monumental building or a splendid architectural
design, witness the Guggenheim museum in Bilbao designed by Frank Gehry or the Centre Beaubourg
designed by Renzo Piano and Richard Rogers and its impact on the depressed Les Halles area of Paris.
Clearly, passers-by cannot be asked a fee. Due to free-rider behaviour, the market tends to under-provide
cultural goods that are non-rival and/or non-excludable. Still, a flourishing cultural climate may pull in
tourism, scarce knowledge workers and new business. The key challenge is to empirically measure these
external effects. For example, the City of Birmingham Symphony Orchestra and relocation of part of the
Royal Ballet to Birmingham have boosted the economic impact of building the largest trade fair of
Britain. De Swaan (2001) argues that language is a public good. More people that read, write and
understand the same language imply larger benefits of learning that language for any person. The public-
good character of language may justify support for drama, literature and film, which would otherwise be
considered excludable, private goods.
Rapid technological changes change the nature of cultural goods. In the past one could record fine
classical music on a cassette from radio or a record, but quality was not perfect. Today one gets their