Causality and Museum Subsidies

Abstract

Although museums are major recipients of public money, very little is known regarding what factors cause changes in the level of funding given to particular institutions. It is nevertheless regularly asserted by those affected that governments will reduce the level of subsidy going to those museums that raise revenues for themselves, especially if these revenues were raised through charging for admission. This paper explores the causal influences underlying changes in the level of government grants to museums. Statistically analysing data drawn from a panel of UK museums funded by central government, evidence is found that increases in non-grant income do indeed result in a statistically significant reduction in future government subsidies. It is however unclear whether these reductions are sufficient to offset entirely the financial benefits from charging or the pursuit of private benefactors. Despite the government's avowed intention to widen access to museums, changes in visitor numbers do not appear to cause changes in government grants.