Risk, Uncertainty and the Performing Arts
The craving for artistic fulfillment by those in the performing arts may be likened to the spiritual pursuits of the holy man in search of divine realization, for not only is the nurture and discipline of talent characteristically a highly ascetic process, the expected rewards traditionally provide meagre financial compensation. The probabilities determining these expected rewards are subject not only to the scarcity of genius but also to the size of the net inflow into the performing arts and the perspicacity with which entrants judge their own training and abilities. For example, other things equal, a sudden influx of stage-struck dilettantes would diminish the probability of a large income, thereby reducing the income expected from such pursuits. (p. 243-259)
Empirical estimation of returns.
Empirical estimation of costs.
Observed and empirical estimates of income differentials.