Is “cost disease” contagious? The case of early music ensembles

The article aims to supplement traditional explanations of why performing arts institutions tend to run a deficit. The case of early music ensembles shows that the traditionally cited mechanisms do not suffice to explain why these institutions catch Baumol’s “cost disease.” Baumol’s model may be supplemented by another, based on two related hypotheses: the deepening deficit of early music ensembles is related to their going professional and is due to the fact that they are simultaneously competing with subsidized orchestras on two markets: the concert market and the labor market for musicians.