Louis Lévy-Garboua and Claude Montmarquette* If you gotta ask, you ain’t never going to know. (Louis Armstrong1) An economist being asked to specify and estimate demand for the arts might begin to say that it is not essentially different from the demand for more down-to-earth consumer goods and services. Then, and only then, he or she would want to consider the specificity of ‘art’. This short story summarizes the lines of research followed by art and cultural economics so far in the field of demand. By and large, the first economic studies were concerned with income and price elasticities, which they drew from scanty data, basic consumer theory and crude econometric models. The literature is still groping towards firm answers to simple questions, such as: is art a luxury good? Is it price-elastic or inelastic? Do art goods have close substitutes? However, the consumption of art challenges the conventional assumptions of homogeneous goods and services, completed learning of tastes, independence of choice among individuals and so forth. How do we deal with aesthetic quality and the heterogeneity of tastes? How do consumers who do not have full knowledge of their own taste decide and rely on others? Indeed, if you are going to ask why you like the theatre of Shakespeare, the operas of Puccini, and the paintings of Manet, you are never going to know. The subtle alchemy of individual taste for the arts ultimately relies on experience. Following the lead of Baumol and Bowen (1966) and the...
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