“Art isn’t a luxury, it’s a necessity.”  For those of us working in the arts, this is an accepted truth.  We are consistently advocating for programs that make arts accessible to all communities, income levels, and cultures.  I firmly believe in these activities and believe that the art we create becomes better for it.  Still, as artists, we must support ourselves and the work we do has value.  So how much can we charge for our art?

In his article, “Nobody Knows What Luxury Is Anymore,” Mark Bain asserts that the luxury market is changing.  The market is still looking for items that show status, but also social, environmental, and cultural awareness.  While Bain was focused on fashion, I was left wondering how does this impact how artists price their work?  Does this impact the competitive price for theater?

Luxury pricing implies that consumers psychologically associate the higher priced item with luxury.  The consumer gains status by purchasing a luxury item.  Luxury items are part of an inelastic market where the price of the item has little direct impact on how well the item sells.  A market is never perfectly elastic or inelastic.  Good examples of these types of items that are part of an inelastic market are found in high fashion or high-end vehicles.

Over the years there have been differing ideas of how to describe this elite class of people.  Veblen called this group the leisure class, David Brooks had “bobos” and Elizabeth Currid-Halkett theorized a new aspirational class.  With each of these theories, individuals prioritize their spending by the perception of others.   Ranging from choices in home decoration to choosing to purchase organic tomatoes.

The theater is not a physical item that can be used to show status like a choice in décor. But, like organic tomatoes, the theater can show cultural awareness.  Like many art forms, theater can be used for social commentary and to increase environmental awareness.  Purchasing tickets, and attending, the theater can provide the individual with an entrée to elite social groups.  Being seen to understand culture positively impacts the perception of an individual by others.

Following this line of thought, the price of tickets could be considered to trend towards being inelastic, unless the price impacts how the theater selling the tickets is viewed by society.

If the market is inelastic, ticket prices could be increased to cover all the expenses that are incurred in the creation of theater.  A concept that has not been an option in the non-profit area.  If we can raise the price, why don’t we?

Prices become more elastic when a similar product is available.  Another theater that offers the same social impact will be appealing to the same market. Ticket prices will need to be competitive.

For nonprofits, it comes back to the important question of does this serve our mission?  For those of us that work in theaters that have missions about building community, or making art available to everyone, increasing prices could become a barrier to reaching those audiences.  For a nonprofit, perhaps the appeal to this class is in becoming a donor.

So, can theater tickets be priced as a luxury item?  It depends on the theater and its goals.

 

Resources

Bain, Mark. Nobody Knows What Luxury is Anymore 

 

Currid-Halket, Elizabeth. The Sum of Small Things: A Theory of the Aspirational Class

Veblen, Thorstein. The Theory of the Leisure Class

Brooks, David. Bobos in Paradise: The New Upper Class and How They Got There