Estimating the Earnings Penalty and Foregone Income Function for Iranian Literary Authors; A Research in the Economics of Literature

According to the statistics provided by the Book House of the Ministry of Culture and Islamic Guidance, around 5,000 authors published their books of fiction or novel from 2017 to 2019. Although literary writers constitute a central position in the creative class, no comprehensive study has been conducted on their income and labor market characteristics yet. In cultural economics, authors are placed in the category of artists and their labor market characteristics are considered almost identical. Therefore, the studies on artists' labor markets can be employed to identify authors. The theoretical framework is taken from previous research on artistic labor markets and the data have been collected through in-depth interviews with 91 authors in Iran. Multiple regression analysis is carried out to estimate the income penalty function for authors. The findings show that the average income penalty of Iranian writers is 72%, compared to the average income of alternative jobs, and that they annually lose 108 million Toman (i. e., foregone income) because they ignore better-paid alternative occupations to continue being literary authors. The resulting equation proves that the foregone income increases as authors write in more genres, as the number of literary award jury memberships rises, and as they gain higher academic degrees. Foregone income also grows as authors’ experience increases until 24 years, after which increasing the experience results in lower foregone income.