On the optimal level of theatre subsidies

This article examines public subsidies and ticket pricing in Finnish theatre institutions by using the principal-agent model. The model follows ideas presented Prieto-Rodríguez Fernández-Blanko (2006) their on British museum sector. idea of this is to test how well theoretical line with data theatres. aim paper justify high share sector show that should be inelastic segment demand schedule. theatres covers years 2007 – 2011 58 subsidised law, including National Opera. results empirical examination services price inelastic. According results, an increase number visitors increases also optimal but less than proportionally indicating lower larger towns where potential for visits higher due a population. argues even though economic approaches examining arts culture not unproblematic, they used further developed.