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Baumol Effect

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Re: Baumol Effect

#11

Post by skybrian »

i_am_proteus wrote: post #5
anm89 wrote: post #3

"they pointed out that the same number of musicians is needed to play a Beethoven string quartet today as was needed in the 19th century; the productivity of classical music performance has not increased. On the other hand, the real wages of musicians (as in all other professions) have increased greatly since the 19th century" This seems painfully naive to the point of farce. Do they really believe the value of playi…

Seriously. They also ignore the fact that the productivity of classical music performance has increased. Four musicians and their instruments can perform a string quartet for a crowd the same today as they could in 1850. Four musicians and an engineer with instruments and recording gear can record that track today and make it available to the masses via one of a number of media vehicles-- and that recording and those…

You might also think about the effects of amplification and large video screens that can allow some live performances to reach more people.

But we should ignore that, because the point of the comparison is to find something that hasn't changed between now and then and compare the cost of labor. This is of course cherry-picking, but it's not intended to be typical. It's a striking example.

Re: Baumol Effect

#12

Post by JamesBarney »

I've seen a lot of recent analysis related to baumol effect. The analysis usually looks into productivity gains, finds none then that declares baumol cost disease. But I feel like this is incomplete. We need to know why we don't see productivity gains. For instance the nature of live music is that it's unscalable (excluding larger venues) but pharmacists can't be scaled due to regulations. And a lot of the broad statistical measures that that I've seen used to find baumol cost disease can't necessarily differentiate the two.

Re: Baumol Effect

#13

Post by bleh123 »

anm89 wrote: post #3

"they pointed out that the same number of musicians is needed to play a Beethoven string quartet today as was needed in the 19th century; the productivity of classical music performance has not increased. On the other hand, the real wages of musicians (as in all other professions) have increased greatly since the 19th century" This seems painfully naive to the point of farce. Do they really believe the value of playi…

Precisely. When you also factor in the productivity derived from an increased access to learning resources on the internet and industrial scale production of equipment that would have been unimaginable in the early 19th century. . .OF COURSE the productivity of almost all fields of the arts has increased significantly.

The concept of a performance isn't limited to the few minutes the artists are on stage, the quality of the performance and what it takes to get there are built over years and this has been very nicely democratized over even the past decade than at most times in Human history.

Re: Baumol Effect

#14

Post by H8crilA »

JamesBarney wrote: post #12

I've seen a lot of recent analysis related to baumol effect. The analysis usually looks into productivity gains, finds none then that declares baumol cost disease. But I feel like this is incomplete. We need to know why we don't see productivity gains. For instance the nature of live music is that it's unscalable (excluding larger venues) but pharmacists can't be scaled due to regulations. And a lot of the broad stat…

Isnt it usually about services? Like teachers or massage therapists or barbers. There's a limit of how many people one of them can serve a day.

Shops (including pharmacies) have probably become more effective - look at Amazon. A lot of shopping is online which is surely more productive (for example - you can buy without driving there first).

The Economist had an article on the topic recently: https://www.economist.com/finance-and-economics/2019/06/20/t...

Re: Baumol Effect

#15

Post by taneq »

It seems pretty obvious to me that jobs which show the Baumol Effect are ones where the raw labour cost before inflation was dramatically below the value produced for the end customer. For public-facing roles, this value (in monetary terms) will also be driven up by the very effect that drives up the salaries of those producing the value.

Re: Baumol Effect

#16

Post by lkrubner »

LudwigNagasena wrote: post #6
anm89 wrote: post #3

"they pointed out that the same number of musicians is needed to play a Beethoven string quartet today as was needed in the 19th century; the productivity of classical music performance has not increased. On the other hand, the real wages of musicians (as in all other professions) have increased greatly since the 19th century" This seems painfully naive to the point of farce. Do they really believe the value of playi…

Did you dismiss physics for the same reason? A perfectly elastic ball rolling down a frictionless plane, how absurd!

In every class that I took, any such example was always introduced with "Not that a perfectly elastic ball actually exists" whereas with this Baumol effect they are suggesting that this is a real thing in the real world.

Re: Baumol Effect

#17

Post by perfmode »

> Baumol and Bowen pointed out that the same number of musicians is needed to play a Beethoven string quartet today as was needed in the 19th century; the productivity of classical music performance has not increased.

it’s kind of odd to consider a performance more productive if it can be done with fewer people. what if productivity is being able to entertain more people with the same number of performers?

Re: Baumol Effect

#18

Post by legoto »

perfmode wrote: post #17

> Baumol and Bowen pointed out that the same number of musicians is needed to play a Beethoven string quartet today as was needed in the 19th century; the productivity of classical music performance has not increased. it’s kind of odd to consider a performance more productive if it can be done with fewer people. what if productivity is being able to entertain more people with the same number of performers?

Actually, I can 'play' a Beethoven string quartet from my phone by myself. So technically classical music performance productivity, in the loosest definition possible, has increased. Of course, as you mentioned, that could be considered an arbitrary metric.

Re: Baumol Effect

#20

Post by beefield »

Weird. One can hear arguments that it is the very fact that some people get paid lot as a proof that these people are more productive than others. But that argument seems to apply a bit selectively, and nurses and teachers somehow do not get more productive as their salaries increase.

It's almost like economics would be more like ideology than actual science.

[edit: took away couple of pejorative and unnecessary words]

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