What is Baumol and Bowen’s law?

Management Dictionary
Corporate and Market Finance, Strategic Management, Sustainable Development and CSR

60 vues

In 1966, American researchers William Baumol and William Bowen turned their attention to the arts and culture sector, and more specifically to the performing arts. They observed the very limited potential for productivity gainsand a predominance of fixed structural costs over variable costs. This situation ultimately leads to structural deficits for artistic and cultural organizations.

Sometimes referred to as the “cost disease“, this economic condition is further exacerbated by societal expectationsplaced on the arts and culture. However, it tends to underestimate the capacity for innovation within artistic and cultural organizations, as well as the potential for ancillary revenue streams arising from concerts or performances, such as merchandising.

Finally, the model fails to account for a wide range of economic and non-economic externalities generated by these activities.

Liens et ressources

Mots clés

arts and culture, Baumol and Bowen, economies of scale, inflation, innovation, performing arts, productivity, rising costs, structural costs, territorial impact

Auteur.e(s)

PLAISANCE Guillaume
Senior Lecturer
IAE Bordeaux

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