Economic Analysis: Subsidizing Leisure vs. Arts and Performance

This essay provides an economic analysis of government subsidies, focusing on the leisure industry, particularly the video game sector, in contrast to the arts and performing arts. The introduction highlights the importance of subsidies for industry growth, arguing that governments prioritize sectors contributing to economic improvement and employment. The essay explores the factors influencing subsidy allocation, including price, access, and ownership, and examines the shift towards video games over art galleries. It discusses economic theories, the impact of media reproduction costs, and the role of television and other entertainment forms. Furthermore, the essay considers the benefits of the leisure industry, such as job creation and revenue generation, and contrasts it with the limited employment potential of the arts. The essay also references the UK's video game industry success, government investment strategies, and the impact of subsidy cuts on arts organizations, and the application of Becker's time allocation model in understanding consumer behavior. The document examines the reasons behind the government's prioritization of video games, emphasizing their economic impact and potential for international promotion. The analysis shows the government's strategic decisions for economic growth and development.

Leisure Essay

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
General Argument On Giving Subsidy To Leisure Industry..................................................1
The government would subsidize video games at a time when they cut subsidy to art galleries
and the performing arts...........................................................................................................3
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Subsidy is very important for any industry. It will be helpful to run the industry or the
businesses more smoothly. The government is the one who are liable to grant the subsidy for
different sectors in their country. This essay shows the importance of the video-games industry
and leisure industry in improving the economical condition of the country (Bekar and Haswell,
2013). Therefore, the government are more focused on providing the subsidy to these sectors.
Further, this essay also shows the disadvantage of giving subsidy to the art galleries and
performing arts because they are not helping in improving the employment rates of the country.
General Argument On Giving Subsidy To Leisure Industry
The subsidy of leisure industries is depended on the price allocation, restricted access,
control on the total ownership and general rules. The most active leisure physically is on the
decline of its sustainability, when some is having their age 21 or so. The pattern of male and
female leisure are very different from each other. The basic idea about leisure is that it requires
only time not goods (Coblence Normandin and Poisson, 2014). The demand is quite similar as
compare to the supply of labour function. The determination of this is done by using income,
price and wages accordingly. The problem based on leisure is conceptually unsatisfactory. It will
include different fields like entertainment, sports, tourist etc.
The current government policies are majorly focused on giving subsidy to video games
industry by cutting down the subsidy to different art galleries and performing arts. It is very
necessary to take all the economic conditions into consideration because all these components
are having some regulatory norms for getting the subsidy from the government. The maximum
benefits are given to the social media because the bodies of government are more concerned
about the economic significance of media because it is playing an essential role in enhancing the
reproducibility by managing the falling cost (Wesley and Barczak, 2016). It is the prime reason
the government bodies are giving more attention to subsidizing those factors which are related to
the industries of video-games rather than those industries which are focused on performing arts
and galleries.
In the recent years the media reproduction costs were very high because the degree of
reproducibility was high. This will result in the formation of monopolies because it is becoming
very difficult for the production of new entrants. Media includes entertainment which means
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Hollywood. The monopoly was created because there are various general works and the most
economical are caves and Vogal. It is very important for the government to measure the final
output from all the industries because it will be very essential in determining which one will be
subsidized more. The difficulty arises in estimating the supply cost because the output are not
reliable. The decisions can not be make on the basis of cost because it will be very problematic.
For entertainment purpose, the most essential requirement is television and the demand is
increasing day by day. The entering price is free because of the technological limitations. But
this does not change the fact that majority of people watches television. It can not be termed as
the pure leisure activity but it could be considered as the joint product. This activity is generating
lots of money and improving the economic condition of the local region as well as of the country
(Laguna, Belmonte and Palomo, 2014). The government is adamant to provide subsidy to this
because from here, they can improve the economic condition more. Different leisure have
demand functions which is based on the sales or attendance of the pricing data. The elasticity
price must be high and the leisure goods must be normal goods which can also be referred as the
luxury good and this is equivalent to income.
This industry is more focused on generating the finance and making money and it is
based on the non-pricing or other variables of income. Majority of the people will not take part in
this if they are not producing any sort of money. The another thing is this industry is reducing the
unemployment rates. As the technology is developed, it will provide more opportunities for local
people to get employed. The demand is very high in leisure industry and more high in video
gaming sector. The salary or wages offered to individual is al;so very high (Moore and
Campbell, 2010). The government is getting high benefit from this, because they are now able to
reduce the rate of unemployment. It is directly having the impact on the economic condition of
the country.
However, art galleries and performance art is focused on single person because this kind
of skills revolves around the capabilities of an individual. It will be very difficult to increase the
rate of employment. There are very few people who are having vast experience and they are the
one who can survive in this industry. So for government, to provide subsidy to these sectors is
very difficult.
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The economic theories which will provide the leisure as per the wages and prices which
are based on the income and the effects of substitute is conceptually unsatisfactory. This will be
having very less useful equipments which will be helpful in analysing the individuals choice
behaviour. The best solution for this is using Becker's time allocation model. The major issues
identified by this model are;
 The scarcity of time as a resource technology which can be used in increasing the
productivity of time.
 Household is not only a consumer but a producer as well.
 The function of utility is not having any demand in context with variety.
 The last thing is related to interaction among the multiple connected individuals in the
leisure of production or consumption.
The activities which are specified as leisure must be having all the components related to
the total production of household. In this particular model, the market equilibrium is achieved, so
that the value of the unit time will be equal to the market wage rates which can be earned by an
individual. It will also give the comparative advantage to some members of the unit. So that even
in the production house, specialists are used. The most basic dependents of this model is
children. They can cause problem in the house hold production. They can not be considered as
pure leisure goods. Few complications which can cause the problem in future are; the additional
capital, different taste problem, jointness with other outputs and the final outcome of uncertainty
and event risk.
The government would subsidize video games at a time when they cut subsidy to art galleries
and the performing arts.
According to the Nesta, which stands for the National Endowment for Science,
Technology and Arts, UK is among the most successful industry in terms of Video games
(Beaumont, 2009). It has achieved the third position at the global level. As the sectors has been
one of the main reason for the growth in GDP and development of UK so government has
provided subsidy to it. This has provided innovation as well as promoted the online gaming
platform in the country. Government has provided the subsidize to this sector to promote the
"British Culture" which will support and sustain the creation of it. As the development in this
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sector without the government support was more so if subsidize is provided the business areas of
this sector will flourish. In terms of global sales, Video games generated amount of £2 B.
However, by the year 2012, at international level the games' industry has exceeds more than (£41
billion). The main methodology of the government to invest in this industry was that small
gaming firms were also earning more than a thousand pounds. By investing the £4m they would
be getting large number of employment and returns in terms of taxes. To UK economy they were
providing more than £4.5m and employment for more than 20,000 people (Brandenburge and
Nalebuff, 2011).
The demand studies will be having some problems with their price because sometimes it
can overlook the Becker model where the focus is on the production rather than a final good.
Some essential work is done so that different prices and income elasticities can be maintained
which is based on Becker model. Few specific areas for the studies in demand are Music, films,
sports, gym, museums, wildlife hunting etc. few studies in the general areas are putting more
effect on the non-pricing and income variables. It shows that people will not take part even when
the price is zero. Few perceptions of price are based on the standard economic models which is
based on the demands which give response to charged. It is having some pushes and pulls. The
pushes are appreciation capital, age, education, tribal affiliation etc. Pulls are related to cultural
barriers, wildlife hunting, gender, age etc.
The minister of culture and digital economy, Ed Vaizey also supported the investment as
this has promoted the country internationally and their business creativity can be shown to
others. From the earlier period now government has provided the 25% discount in the gaming
production cost. However, Ed Vaizey declared that there would be price cut of 30% in Arts
Council budget (Kaley, 2012). As per the study it was also found that there are declines in the
rate of leisure after the age of 21 (Laguna Sánchez, Belmonte and Palomo Martínez, 2014;
Markusen and Gadwa, 2010). People are less interested in Arts and creativity. This was affecting
the services which are provided by the government. More than 850 arts organization were
affected directly and indirectly through this decision. As per The Telegraph article, the funding
was cut by ACE for the following reason:
 Money which was used in the arts now can be utilized at some other places to uplift that
areas.
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 They mentioned that now orchestras, museums, and theatre groups has been sufficiently
grown that they can independently fund themselves.
 Another question which was asked by the government was that 'Why local people should
pay taxes for the those high class people who are attending an Opera at Covet Garden".
 At last, they made the statement that they must more focus on the areas of hospital,
schools, safety of people rather than looking at the areas of theatre and dance ensembles.
Another things which needs to be noticed is that government has to spend $1 which will
return than $1.36 at the end of the year while the gaming industry was providing the more than
thousands of dollars in the single months that too from the single company (Coblence,
Normandin and Poisson-de Haro, 2014). Earning from that sectors in terms of the taxes will help
the government to support other sectors like hospitality, travel and tourism and many more
which can further help the country to grow.
Besides this, there were very less number of people who are getting benefits from the
industry. In UK, there are more than 2000 video games companies which were making more
than £4.5 million per day. So in terms of development and earning more returns the government
has produced the righteous decision. These returns are used by them for the development of the
other sectors which lacks. It has also increased the export level of the country. At international
level many people are interested to visit the art gallerias but they can purchase the video-games
directly at there homes.
This will help the country to boost the talent, creativity and development at the same
time. According to the press release, in 2016, the industry has grown to more than £84.1 billion/
year. Such contribution to the country will help them to boost their other business and
technology (Downs and Ramsey, 2012; Gunnell and Bright, 2011). Video games like Lego
Marvel’s Avengers, No Man’s Sky, Horizon Zero Dawn have made their name at the
international level. In this Lego Marvel’s Avengers is among the best selling video-games.
Moreover, it was found that government was facing the price loss in this art gallerias segment
which also has supported the removal of the subsidy. In UK, there was fall this industry were
more than 1.4m museums and galleries nearly fell.
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There are many other disadvantages which government was getting that most the people
visited the art galleries only at the special period and they do not wanted the local people to pay
taxes for the enjoyment of others. Also, according to the micro economies' theory, leisure must
be provided to those companies which are providing benefits to the public as well as
government. They have promoted the country at the global level and has provided the
employment along with tax. Government was too facing while supporting such companies
(Coblence, Normandin and Poisson-de Haro, 2014). Not only children, adults and at every age
group people enjoy playing the video games.
They too will get advantage from it and which will promote more. This has supported the
other entertainment facility such as television which are mostly used by people. Many bars and
restro has opened the video games stores which are helping them to earn more. As the art
galleries has was affecting the GDP and revenue collection of the country so the decision was
correctly made. Moreover, according to a report, customer level has also raised after providing
the subsidy to the video game's industry. Internationally, the business has taken growth through
online stores. As per the customer reviews they were more satisfied through the decision of the
government.
After the announcement of the subsidy the government and that industry both got profit.
Though they have to face the loss due to the art galleries but when comparison is done they have
got more profit and advantages. The government has gain the advantages in many forms such as
aesthetically, economically, philosophically and socially. All this are the immeasurable
advantages which has been received by the UK government and that industry. On other
perspectives art galleries are now mostly owned by the private individuals who can bear the
expenses of the industry (Davies and Sigthorsson, 2013). Video games industry are the industries
which are everlasting and little improvement in them can help to grow more business.
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CONCLUSION
From the above essay it can be concluded that the government has taken the accurate
decision in supporting the video game's industry and providing them subsidy. This has helped
people, industry and government in different ways. Further, the art galleries can be effectively
managed by the private individuals who are running them. Leisure must be provide to the
industries which are economically supporting the country development in terms of employment
as well as taxation. Advantages are different but development is necessary which was not
provided by art galleries.
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REFERENCES
Books and Journals
Bekar, C. and Haswell, E., 2013. General purpose technologies. Handbook on the Digital
Creative Economy. pp.9.
Brandenburger, A. M. and Nalebuff, B. J., 2011. Co-opetition. Crown Business.
Coblence, E., Normandin, F. and Poisson-de Haro, S., 2014. Sustaining Growth through
Business Model Evolution: The Industrialization of the Montreal Museum of Fine Arts
(1986–2012). The Journal of Arts Management, Law, and Society. 44(3). pp.126-144.
Coblence, E., Normandin, F. and Poisson-de Haro, S., 2014. Sustaining Growth through
Business Model Evolution: The Industrialization of the Montreal Museum of Fine Arts
(1986–2012). The Journal of Arts Management, Law, and Society. 44(3). pp.126-144.
Davies, R. and Sigthorsson, G., 2013. Introducing the creative industries: from theory to
practice. SAGE Publications Limited.
Downs, W. M. and Ramsey, E., 2012. The Art of Theatre: A Concise Introduction. Cengage
Learning.
GUNNELL, B. and Bright, M., 2011. Make a Job Don’t Take a Job. Building the Creative
Society TM, London, New Deal of the Mind.
Laguna Sánchez, P., Belmonte, A. V. and Palomo Martínez, J., 2014. Women, entrepreneurship
and creative cultural industries: a combination on the rise in Spain in times of crisis. ESIC
Market. Economic & Business Journal. 45(3).
Markusen, A. and Gadwa, A., 2010. Creative placemaking. Washington, DC: National
Endowment for the Arts.
Moore, K. and Campbell, R., 2010. Mastery with age: The appeal of the traditional arts to senior
citizens in contemporary Japan. Japanstudien. 21(1). pp.223-251.
Wesley, D. and Barczak, G., 2016. Innovation and marketing in the video game industry:
avoiding the performance trap. CRC Press.
Online
Beaumont , C., 2009. British video games industry needs tax breaks, warns report. [Online].
Available through: <http://www.telegraph.co.uk/technology/video-games/6095463/UK-
video-games-industry-needs-tax-breaks-warns-report.html>. [Accessed on 22nd July,
2017]
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Kaley, I., 2012. [Online]. On funding for Arts Council England. Available through:
<http://thestudentreview.co.uk/2012/06/on-funding-for-the-arts-council-england/>.
[Accessed on 22nd July, 2017]
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