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MoMA Raises Its Admission Charge: Price Discrimination, and Why It's Justified

Jon Bruner
This article is more than 9 years old.

The courtyard at MoMA in New York. Image via Wikipedia

Culture is getting a little more expensive: New York's Museum of Modern Art announced today [pdf] that adult admission to the museum will cost $25 beginning September 1, up from the current $20.

The change has elicited some protest from observers who complain that the museum is too expensive already. But others acknowledge the difficult realities of museum financing: writing in The Awl, Choire Sicha pens a moderate explanation beneath an immoderate headline, explaining that, like newspapers and colleges, museums can account for only a small fraction of their operating expenses with income from visitors/readers/students:

Museums in this way are like newspapers (and maybe colleges as well): the subscribers to a newspaper pay for some of what they "see"—the words and pictures—but don't even begin to cover the cost of actually publishing a newspaper. Those customers just can't be, in most cases, where the money comes from.

He's entirely right about that, and the college comparison is apt in another sense as well: both museums and colleges provide ways to get around their high list prices through means that economists call price discrimination ('discrimination' here being a technical economics term, without the usual negative connotation). Price discrimination involves identifying customers who can't or won't pay full price, figuring out how to separate them from the full-price crowd, and then offering them a different price.

In the case of colleges, price discrimination is a fairly straightforward filtering process: if you can't pay full price, you submit an application for financial aid that explains why, and hopefully the college responds by effectively lowering its tuition for you.

Since it would be impractical for Museums to demand copies of tax returns from their visitors, they use slightly less efficient methods of price discrimination, like free admission one day per week (in the case of MoMA that's 4pm to 8:30pm on Friday nights) or community outreach programs that identify local groups and invite them to visit the museum for free or at a reduced rate.

The result of MoMA's price discrimination is that if you're a local art lover who can't afford the $25 admission fee, you can probably find ways around it: you can go on a Friday night; maybe your company has made a donation to MoMA that entitles its employees to free admission (Forbes has!); or you can find a friend with a membership and tag along. This amounts to price discrimination by inconvenience: would-be visitors who can easily afford the $25 charge won't bother finding ways to visit for free.

The people left paying the full $25 fee are the European tourists who would really rather be spending their time down the street at the Apple store, but who spend an hour in the museum photographing everything in sight without really looking at it so that they can return with some evidence of cultural edification.

MoMA's rate hike amounts to a transfer from the tourists, who pay from their gigantic bags full of Euros, to local art appreciators, who take the transfer in the form of cultural services.


