| |
World Cities Summit Issue, Jun 2008
Cities, Culture and Happiness
Bruno S. Frey
DOES CULTURE MAKE PEOPLE HAPPY OR DO HAPPY PERSONS ATTEND MORE CULTURAL EVENTS?
It might be argued that the positive relationship revealed in Figure 1 is due to quite different factors. It could, for instance, be claimed that persons with higher income are happier and attend more cultural activities because they can more easily afford to do so. Both statements are indeed in line with the results of scientific research. Persons with higher income more often report that they are happy than those with lower income. At the same time, it is well-known that mostly persons with above average income visit artistic events. The argument raised must therefore be taken seriously.
A more thorough analysis considers the relationship between artistic consumption and happiness using advanced statistical (or econometric) methods, in particular multiple, simultaneous regression estimates. The empirical results confirm that art is mostly consumed by persons with above average incomes. Even with this fact taken into account, the relationship graphically shown in Figure 1 is supported: the more artistic events people attend, the more satisfied they are with their lives.
This positive relationship between happiness and culture is good news for the cultural sector and the cultural industries. However, the causal direction remains open. Does attending more cultural events raise life satisfaction, or is the opposite true, namely, are happy people more likely to attend cultural events? So far, scientific research has not been able to answer this question decisively, mostly because the data available are of insufficient quality. Nevertheless, various aspects strongly suggest both causal directions being relevant. Happier persons are cognitively more open, more inquisitive and socially more active, resulting in more visits to cultural venues catering to these preferences. At the same time, it is obvious that art can contribute to an individual’s well-being. However, the effect does not necessarily apply to the same extent to all types of art. An individual who attends a deeply pessimistic theatrical play, or visits a museum that shows depressing or even distressing paintings is unlikely to become happier. On the other hand, a beautiful play or an attractive show of paintings is likely to raise people’s well-being.
POLICY CONCLUSIONS
The empirical results have been produced with the help of data from Germany. The situation may be different in other countries. This is certainly true and must be left to future research. On the basis of what is known today, it may, nevertheless, be proposed carefully that similar relationships pertain to different countries and regions of the world: persons with higher income exert a higher demand for culture than do people with low income and, at the same time, people consuming culture tend to be more satisfied with the life they lead.
These insights are of immediate relevance for policy. Countries experiencing successful economic development should take into account that their population will exert an increasing demand for cultural activities in the future. The decisive question is in what way culture should be encouraged by policy. As has been discussed extensively in the Economics of Art, there are many different ways for the government to support the arts. If the state supports the arts through direct subsidies, it makes a decision at the same time about what kind of art is supported. This would, for example, be the case if the government subsidises or fully finances the establishment of an opera house. In such a case, only this particular form of art benefits. Art can also be supported by granting tax reductions to patrons of the arts. In that case, the preferences of the individual supporter, rather than those of the government, are decisive. For example, a wealthy person donates $10 million to establish a museum for impressionist art. Assuming a marginal tax rate of 60%, the donation would cost 40% or $4 million, but the donor can nevertheless impose his/her preferences on the museum and benefit from the social recognition that comes with having a museum named after oneself. While the loss of tax income to the state of $6 million must be borne by the population as a whole (since the money cannot be used for other purposes), it has no say with regard to the funds that are going to the museum. Strict regulations concerning tax deductibility can change this outcome, but has the disadvantage of an unfortunate bureaucratic interference.
A visionary alternative to direct subsidies or tax reductions would be the establishment of a system of culture vouchers. The recipients of these vouchers could be anyone, for example, every resident of a country or all taxpayers; the total value of these vouchers could be freely determined. The recipients could use the voucher as if it were cash to pay for access to art institutions the government deems worthy and puts on a corresponding list. The venues can then cash the vouchers they received at the treasury. As a consequence, the suppliers of cultural services would have a strong interest to offer art experiences the population appreciates; in addition, they would be induced to advertise their services in an attractive way. In contrast to what many people believe, culture vouchers do not necessarily induce suppliers of art to cater to the masses, that is, to produce “popular” art, only. They can also offer art forms appreciated by only a minority that is prepared to spend a large part of their vouchers on these products. One of the strong points of a voucher system is that the recipients of vouchers have a strong incentive to use the vouchers and to attend cultural events rather than to let them go to waste. They serve as a welcome means to bring the substantial share of people who admit to “never” or “rarely” attending cultural events to start engaging in it. Even if culture vouchers are passed on, culture is associated with value. This establishes a beneficial link between the “culture-absent” part of the population and the arts.
The various ways of supporting the arts differ with respect to how they take into account the increasing demand for artistic events. Culture vouchers reflect most strongly the preferences of the population, while tax reductions do this for a particular group of people, in general high-income recipients who, due to their higher marginal tax rates, profit the most. Direct subsidies shift the decision about what form of art is to be supported to politicians and public officials. The various forms of public support can well be combined, especially for art forms requiring high set-up costs—for instance, opera houses or museums; a part of the total subsidies can be given ex ante by a direct subsidy to mitigate the initial financing problems and to provide more planning security for the administrators of the cultural venues.
I |
|
