Creative Inputs as the Cause of Baumol's Cost Disease: The Example of Media Services
Journal of Media Economics, Vol. 22, No. 4, pp. 239- 252
20 Pages Posted: 6 Jan 2010 Last revised: 30 May 2012
Date Written: December 30, 2009
This article explains that the most important aspect of W. J. Baumol's idea of cost disease is the fundamental intuition that there are some types of labor's contributions that are irreplaceable by new technologies. These contributions are indentified as “creative inputs”: original ideas, concepts, actions, and inductive solutions to ill-defined problems. This article also empirically demonstrates that media content activities are stagnant, whereas activities involved in the distribution and exhibition of media content are progressive.
Keywords: Baumol Cost disease, media services, media industries, creativity, innovation, service industries
JEL Classification: L80, O31
Suggested Citation: Suggested Citation