The productivity of performing art organisations versus labor costs

Motivation: The study of the problem of “cost disease” contributes to the possibility of creating a model for effective subsidy to cultural institutions operating in the field of performing arts from public funds. The study also forms a part of a broader reflection on the values of culture, the humanism of culture and the economy in general. Aim: This article is to examine the connection between productivity and labor costs in public theatres in Poland. We investigate what the level of productivity depends on. We check whether it is based on costs or the so-called income gap or another factor. We verify whether costs in PAOs in Poland increase according to the theory of Baumol’s cost disease and whether labor costs are particularly significant in total costs. Results: Labor costs should be taken into account when subsidizing performing art organizations, as productivity growth depends on having funds to cover labor costs and increasing employment.

COST DISEASE PHENOMENON OF THE CULTURAL AND CREATIVE INDUSTRIES IN UKRAINE

The study of the analysis of the dynamics of indicators that characterize the current state of development of the creative industries sector of Ukraine was conducted to conclude the presence or absence of signs of "cost disease". The analysis was conducted at a high level of aggregation: distinguishing only two segments of the creative industries sector: cultural and creative. The study's relevance is that in a crisis in the economy, it is advisable to diagnose sectors that need support by attracting additional funding from the budget or private funds, as the losses that occur are long-term and difficult to compensate. The study aims to empirically verify the theoretical regularity of Baumol W.I., Bowen W.G. on the manifestation of signs of "cost disease" in the sector of creative industries of the economy of Ukraine based on available statistics. The study's methodology was to identify the symptoms of "cost disease" by comparing indicators of specific segments of the creative industries sector with indicators of macroeconomic dynamics. For this purpose, the time series of macroeconomic characteristics of the Ukrainian economy was used in work. Studies have shown the absence of signs of cost disease in the creative segment of the creative industries sector and the presence of two of the three signs in the cultural segment. In particular, the "lagging productivity" formed during the last five years has been revealed in the cultural segment. The second sign was also confirmed: "catching up" with wages, which is that wages in the cultural segment are growing faster than labour productivity in the diagnosed segment. Comparing the dynamics of the price index in the national economy and the cultural segment of the creative industries sector, we see that prices in the national economy grew faster than prices for services provided in the cultural segment of the creative industries sector. The third sign that indicates the presence of "cost disease" in the cultural segment - is missing. However, the specific income deficit in the cultural segment of the creative industries sector (which has a positive value due to one of the three signs of "cost disease") is offset by two other factors - "productivity lag" and "catching up" wage growth.

Determinants of China’s health expenditure growth: based on Baumol’s cost disease theory

Background During the past four decades, China’s total health expenditure and health expenditure per capita have both experienced a dramatic increase in growth rate. This study aims to explore the determinants of health expenditure growth and the influencing mechanism of these determinants, with considering the productivity efficiency represented by Baumol’s cost disease. Methods Based on the longitudinal data of 30 provincial-level administrative regions in China, from 2010 to 2017, multi-variates regression models were constructed to assess the determinants, including demography, income, Baumol’s cost disease, technology, their effects on per capital total health expenditure growth and the three financing sources: government, society and out-of-pocket health expenditure. Moreover, the Spatial Durbin Model was used to analyze the influence mechanism of determinants on the increase of health expenditure across provinces. Results Among 210 province-year growth rate observations, all of the average growth rate of total health expenditure (12.78%) was much higher than the growth rate of per capita GDP (8.06%). According to the statistical analysis, we found that:(1) Income and Baumol’s cost disease have a significant positive impact on health expenditure growth(P < 0.01). The impact of technical factors on government health expenditure is significantly positive. (2) The determinants affected the growth of health costs in different regions variably; the eastern region is mainly driven by Baumol’s cost disease and technical factors, while the central and western regions are mainly affected by income factors and Baumol’s cost disease. (3) There is a significant spatial spillover effect on the health expenditure growth between regions. The income factor and Baumol’s cost disease have a positive impact on the health expenditure growth in its own region as well as in other regions. Conclusions Income and Baumol’s cost disease significantly contributed to China health expenditure growth. The health expenditure determinants showed spatial varies effect and space spillover effect on the neighborhood areas. Which indicates that a reasonable salary system should be contrasted to meet the changeling from the Baumol’s cost disease, and the necessity of equity in health resource allocation among provinces in China.

Economic Spillover Effects of Industrial Structure Upgrading in China’s Coastal Economic Rims

As a vital element affecting economic efficiency, the impact of marine industrial structure upgrading on marine economy has become a hot topic, and China is not an exception. This paper analyzed the dynamic relationship of marine industrial structure upgrading and marine economy efficiency to verity the “structural bonus” and “cost disease” effects. The results confirmed the existence of cost disease in China’s marine economy, although occasionally it illustrated structural bonus effects with the improvement of the regional marine economy efficiency. The spatial Durbin model (SDM) was introduced to study the spillover effect of local marine industrial structure upgrading (MISU) on the adjacent regions’ marine economy efficiency, and this spillover effect was verified to have agglomerate characteristics in China’s coastal areas. Then several countermeasures were proposed to realize marine ecological civilization and promote regional cooperation in the development of China’s marine economy.

Determinants of China's Health Expenditure Growth: Based on Baumol’s Cost Disease Theory

Background During the past four decades, China's total health expenditure and health expenditure per capita have both experienced a dramatically increase in growth rate. It is essential to understand the driven force of this growth with the new economic context. This study aims to explore the determinants of health expenditure growth and the influencing mechanism of these determinants, with considering the productivity efficiency represented by Baumol's cost disease. Methods Based on the longitudinal data of 30 provincial-level administrative regions in China, from 2010 to 2017, multi-variates regression models were constructed to assess the determinants, including demography, income, Baumol's cost disease, technology, their effects on per capital total health expenditure growth and the three financing sources: government, society and out-of-pocket health expenditure. Moreover, the Spatial Durbin Model was used to analyze the influence mechanism of each factor on the increase of health expenditure across provinces.Results Among 210 province-year observations, all of the average growth rate of total health expenditure (12.78%) was much higher than the growth rate of per capita real GDP (8.06%). According to the statistical analysis, we found that:(1) Income and Baumol’s cost disease have significant positive impact on health expenditure growth(P<0.01). The impact of technical factors on government health expenditure is significantly positive. (2) The determinants affected the growth of health costs in different regions variably, the eastern region is mainly driven by Baumol's cost disease and technical factors, while the central and western regions are mainly affected by income factors and Baumol's cost disease. (3) There is a significant spatial spillover effect on the health expenditure growth between regions. The income factor and Baumol’s cost disease have a positive impact on the health expenditure growth in its own region as well as in other regions.Conclusions Income and Baumol's cost disease significantly contributed to China health expenditure increase growth. The health expenditure determinants showed spatial varies effect and space spillover effect on the neighborhood areas. Which indicates that a reasonable salary system should be contrasted to meet the changeling from the Baumol's cost disease, and the necessary of equity in health resource allocation among provinces in China.

The cost disease blues–do the police suffer from Baumol's cost disease?

PurposeThe purpose of this study is to analyze the growth of unit costs per output in the Finnish police force (2002–2015). Is it higher than the growth of prices in the Finnish economy in general; i.e. higher than the inflation rate? Cost disease theory suggests this to be the case. It says that all labor-intensive, slow-progressive industries suffer from relatively rapidly growing real unit costs and that policing is one among these industries.Design/methodology/approachThe rates of growth of the division-specific unit costs of the police are compared to the inflation rate. Costs and prices are treated as indexed schedules, comparable to each other. The functional divisions under scrutiny are surveillance and emergency operations, criminal investigation, and permits and licenses. The period under analysis is 2002–2015.FindingsThe surveillance and emergency operations and criminal investigation divisions, but not the permits and licenses division, suffer from cost disease. Owing to the persistent digitalization efforts in permits and licenses, the physical productivity of the division has been growing at a rapid rate, and both the nominal and the real unit costs per output of the division have been decreasing over time.Research limitations/implicationsOwing to data limitations, use of a proxy was needed to estimate one of the key variables of the study.Originality/valueThe policy significance of the research question is potentially very high. Prior to this study, there was a near total lack of empirical evidence in this area.

India’s Inequality Trap: The Role Played by Taxation Policies and Automation

Recent increases in automation and unemployment have aggravated income inequality in India. Thus, it is imperative for policy-makers to cut down on inequality and unemployment while promoting planned automation. This paper proposes a joint solution to reform India’s taxation framework to fight income inequality while promoting planned automation. The paper finds that the current tax policies are severely increasing income inequality in India, and this, in turn, has lead to alarming consumption and economic slowdown in key industries. Unable to encourage the demand side, industries have responded by cutting down labour costs. This has created an inequality trap. To bring India out of this trap, it is imperative that India moves ahead with taxing concentrated capital and invests in re-skilling. Further, India also must give effect to Baumol’s cost disease insight and create new job opportunities for the rural youth, which is at the highest risk of unemployment.

Information technology and Baumol's cost disease in healthcare services: a research agenda

PurposeThis paper advances a research agenda for service researchers at the intersection of healthcare and information technologies to improve access to quality healthcare at affordable prices. The article reviews key trends to provide an agenda for research focusing on strategies, governance and management of key service processes.Design/methodology/approachThis paper synthesizes literature in information systems, service management, marketing and healthcare operations to suggest a research agenda. The authors draw on frameworks such as the interpretive model of technology, technology acceptance model, assemblage theories and Baumol's cost disease to develop their arguments.FindingsThe paper situates strategy-related service management questions that service providers and consumers face in the context of emerging healthcare and technology trends. It also derives implications for governance choices and questions related to that.Research limitations/implicationsThe paper discusses service management challenges and concludes with an agenda for future research that touches on governance and service management issues.Practical implicationsThis paper provides implications for healthcare service providers and policymakers to understand new trends in healthcare delivery, technologies and facilities management to meet evolving customer needs.Social implicationsThis paper provides implications for managing healthcare services that touch on many social and societal concerns.Originality/valueThis conceptual paper provides background and review of the work at the intersections of information systems, marketing and healthcare operations to draw implications for future research.