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Americans clearly love their museums. One of the most famous, New York's Metropolitan Museum of Art (the Met), saw a record 6.5 million visitors in 2015. But record attendance doesn't necessarily translate into record revenue. Last month，the Met said it was trying to erase a USS10 million budget deficit. Meanwhile, one of its rivals，the Museum of Modern Art (MoMA), was abundant in cash, but only about three million people stopped by in 2015. Why do some museums flourish while others flounder? My research leads me to believe there are three reasons: fashion, billionaires and demographics.

First, underlying the Met's financial challenges is the problem with the acquisitions policy. Recent directors of the Met did not add much to the museum's modern collection. The argument was that museums such as the MoMA were already providing such works in their collections and that the acquisition of contemporary art by living artists was problematic and risky. However, given the fact that museum-goers increasingly favor contemporary art, the revenue of the Met will likely fall if it isn't able to keep up with the tastes of the customers. And by the time it might recognize this, it's already too late to do much about it because the costs to acquire the in-demand art is sky-high. This leads to a second critical issue-the changing distribution of income and its effects on museum finance and operation. We are living in a boom period for contemporary art. The number of auctions and art fairs has grown enormously to accommodate this growing market. In a world with about 1,800 billionaires, it only takes a relative few to drive high-end art prices to astronomical levels. Works by the German artist Gerhard Richter have generated $1.2 billion in sales in recent years. The soaring prices mean museums simply can't keep up and must usually depend on donations to assemble the best works, or they're priced out. Moreover, billionaires themselves are increasingly setting up their own private museums, further distancing the ability of public museums to get the good stuff.

A third interrelated problem is that demographic issues have put pressure on the revenue side. Unemployment, early retirements and the aging of the population in the US have contributed to increased attendance at museums. You might think it's a good thing, but more traffic means higher costs, and when those additional visitors don't result in more revenue, profitability goes down. This is because of the longstanding movement toward making museums "free" by having individuals, government or businesses "sponsor" the cost. But when that support gets reduced by budget costs or another reason, museums must either cover the cost themselves or lose patrons by suddenly charging fees. There is evidence that attendance rises when economic growth slows, but that's also when those "sponsors" are more likely to begin to disappear.

Museums will certainly continue to exist and provide us with invaluable insights into our culture. But they must exist under economic principles, and it'd be wise for their administrators to consider the economies in their calculations.