A sideways look at economics
Last weekend, I visited the Natural History Museum. It was as impressive as I remember from the last time I went, on a family holiday from Norway when I was about ten. I must admit that I was almost as excited to see the dinosaur skeletons as the five-year old on the front row wearing a dinosaur costume. Entrance to the museum was free, as with all national collections in the UK — several other countries do the same. The government introduced free admission for national museums in 2001, with the goal of making the UK’s culture and heritage accessible to all. Over the next ten years, the number of visitors rose from seven million to almost 18 million. Visiting the Natural History Museum got me thinking: is there a good case, in economic theory, for making museum tickets free?
What should the government charge for the goods and services that they provide? In the case of public goods, where one cannot exclude someone from the consumption of a good (it is non-excludable), and where one person’s consumption of a good does not limit another person’s consumption of that good (it is non-rival), there is an argument for the government to charge nothing at the point of use. Museums are not by definition public goods, however, as it is possible to exclude someone from going to the museum. Even for free museums, one can be denied entry if there are too many people inside. But there are positive externalities from museums that are not easily quantifiable, which make the case for government intervention to subsidise tickets to national museums, or to charge nothing. Similar to libraries, they are merit goods – private goods that have some public good features.
Merit goods tend to be under-consumed in a free market. This is because the benefits to society – or the social benefit – of these institutions are larger than the private benefits, due to positive externalities. When the market ignores these positive spillovers, under-consumption of the good leads to a welfare loss to society – this is an example of market failure. One argument for subsidising tickets to national museums is that if the end goal is to make knowledge and culture available to citizens, leaving ticket prices to the market would mean that some are excluded, because their willingness to pay is below the market price. This could lead to inequality between high- and low-income groups, with people with higher incomes having a higher willingness to pay. Other positive spillovers include that museums facilitate political engagement, by providing citizens with an understanding of their country’s history. Additionally, museums offer so-called non-user benefits — people may appreciate the chance to go to a museum at some point in the future, or knowing that future generations will be able to go to the museum, but choose not to visit the museum today. Actual demand for museums thus goes above market demand. Such demand is hard to measure, although some efforts have been made through, for example, surveying both visitors and non-visitors to a museum, investigating whether property values increase in a city surrounding a museum, or holding popular referenda on museums spending.  There are also other, more quantifiable, positive spillovers from museums. Museums bring tourists to cities, who tend to spend money in the area surrounding the museum (e.g., on food and shopping), thus creating jobs in the local community.
What do UK statistics say about museums’ contribution to society? One report concluded that a high number of visitors has been sustained over time, that the museum sector is a long-term contributor to national well-being, and that its role in promoting creativity should not be overlooked. In 2019-20, 51% of respondents to the UK ‘Taking Part’ survey said that they had been to a museum in the last 12 months. Another report concluded that in England, museums contribute £1.45 billion of economic output, and estimated that they generate £3 for every £1 of public-sector grant they receive.
Evidence is mixed on whether free entry to museums generates a higher level of social equality. In the first seven months after free admission to national museums was introduced in 2001, there was a 62% increase in visits. In 2022 as lockdowns ended, visits to free-entry museums (including museums with special exhibitions which one had to pay for) increased by 183% from the year before, compared with a 101% increase in visits to museums that sold tickets. That difference can partly be explained by the cost-of-living crisis. On the other hand, the higher number of visitors to free-entry museums does not necessarily mean that a higher level of social equality has been achieved. The extra visitors were largely drawn from groups that were already likely to visit museums, and the composition of social groups going to museums remained largely unchanged after introducing free admission. In 2009, the Art Fund concluded that although admission is free, other barriers remain to entering museums and galleries, such as people not feeling qualified enough to appreciate art. And there is no evidence that charging zero admission is the only way of achieving high footfall: the Louvre in Paris and New York’s MOMA both charge for entry, but have high levels of visitors.
On the balance of evidence, there is an economic argument to subsidise museum tickets, or make them completely free, due to the positive spillovers from museums which exceed the private demand for tickets. I certainly enjoyed my visit to the Natural History Museum and quite naturally spent money in the surrounding area, going out for lunch to a nearby bakery. Throughout my years at university I travelled to different cities on a student budget, and definitely made the most of free museum entry. I would argue that making admission to national museums free of charge is a good initiative to make exhibitions accessible to all. To really maximise the impact of free museum entry and use it to drive greater social equality, other measures need to be introduced, such as educational ones – that way we can get closer to the goal of making art and history available to all.
 Museums enjoy 10 years of freedom – BBC News
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