NORWEGIAN SUBSIDIZED THEATRES – FAILURE OR FUTURE?

During the period 1972–1999, the number of Norwegian subsidized theatres was more than doubled, while attendance was largely unchanged. Mainly due to new institutions established during this period, the number of performances increased by about 45%. With about the same total attendance, this means that the attendance per performance decreased by about the same percentage. The number of employees (not counting engaged persons) increased by about 60%. All in all this led to an almost trebling of both costs and public support in real terms. This study deals with possible explanations of this distressing development. Contrary to what is commonly assumed, the new theatres, with cost‐disadvantages of small scale, are only part of the explanation. We provide two main explanations: the crowding out of the subsidized theatres by AV‐media and other performing art institutions, like private theatres and independent performing arts groups, and by other entertainment institutions. In addition, costs have increased substantially due to slow adjustment to reduction in demand, costly arrangements to counter the crowding out effects, and institutional sclerosis. The latter seems to be due to various cost‐increasing arrangements commonly found in public institutions with soft budget constraints, as well as in private monopolies and private firms sheltered by regulations of various kinds.     

On the cultural blessings of fixed book prices

The system of fixed book prices whereby publishers set the price customers pay at the bookstore is very common in Europe and, according to the European Parliament, it is a means of unique cultural importance. For this reason, it is considered to more than outweigh any negative effects on the economic efficiency of such regulations. The main conclusion of this article, however, is that it is quite hard to find convincing evidence, either theoretical or empirical, that fixed book pricing is better, even as a cultural means, than free book pricing.     

Fixed or free book prices: is a hybrid system superior?

One of the main issues in the literature on the economics of books is whether or not a fixed‐price system is better than a free‐price system in providing a wide variety of cheap books. Although numerous studies have been carried out, this issue remains unresolved. Since 1962 Norway has had a fixed‐price system, regulated by a book trade agreement between the publishers’ and booksellers’ associations. On 1 May 2005, Bokavtalen, a new book trade agreement was introduced, representing a new step in a long‐term trend towards a less regulated book trade, and the price system is now actually a hybrid of fixed and free prices. The evaluation is mainly based on extensive use of multivariate regression analyses. Some of the results suggest that the hybrid price system is superior to the old one with regard to each of price, sales, reading and number of titles.