conscientious Posted August 8, 2014 Share Posted August 8, 2014 The following appeared in a memo from a budget planner for the city of Grandview. "It is time for the city of Grandview to stop funding the Grandview Symphony Orchestra. It is true that the symphony struggled financially for many years, but last year private contributions to the symphony increased by 200 percent and attendance at the symphony's concerts-in-the-park series doubled. In addition, the symphony has just announced an increase in ticket prices for next year. For these reasons, we recommend that the city eliminate funding for the Grandview Symphony Orchestra from next year's budget. We predict that the symphony will flourish in the years to come even without funding from the city." Write a response in which you discuss what questions would need to be answered in order to decide whether the recommendation is likely to have the predicted result. Be sure to explain how the answers to these questions would help to evaluate the recommendation. It is possible the budget planner is correct in the argument to stop funding the Grandview Symphony Orchestra. However, the presentation of the argument is missing a lot of information required before such a drastic decision should be made. First of all, the use of percentages can be very misleading. It is possible last year saw only $100 in private contributes, so an increase by 200% only means the orchestra saw $300, which could hardly be enough to fund an entire orchestra on its own. The same goes for the attendance statistic: if last year’s attendance was in fact only 10% of the available seats, doubling to 20% of ticket sales doesn’t seem to compensate for the loss of city funding. The argument is not only unspecific with percentages, but it is also vague with the statement regarding a price increase. Again, we are missing the key information: What is the new price for next year? How much will prices increased? It is impossible to guess how much this change will impact the amount of funding the orchestra can generate by itself. This point also ignores the basic economic principle that as prices rise, demand decreases. It is even possible last year only saw an increase in attendance due to decreased prices, perhaps through a marketing campaign of discounts, which would account for the increased attendance the argument depends upon to continue. Finally, this argument employs the common assumption that what is true for last year will be true for next year. In fact, we know the orchestra struggled financially before last year. There are many reasons one year could be an anomaly. For instance, an event like a traveling national archery competition could have drawn in tourists who attended the orchestra during their visit. The competition wasn’t in town before last year and it won’t be in town next year, so the outlier of last year should be exempt from decisions based on historical performance. Deciding to eliminate funding could have detrimental effects on the orchestra, so it warrants careful consideration. More clear and complete information is required before such a conclusion can be drawn. Link to comment Share on other sites More sharing options...
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