The evolution of entertainment consumption and the emergence of cinema, 1890-1940
AbstractThis paper investigates the role of consumption in the emergence of the motion picture industry in Britain France and the US. A time-lag of at least twelve years between the invention of cinema and the film industry’s take-off suggests that the latter was not mainly technology-driven. In all three countries, demand for spectator entertainment grew at a phenomenal rate, far more still in quantity than in expenditure terms. In 1890 ‘amusements and vacation’ was a luxury service in all three countries. Later, US consumers consumed consistently more cinema than live, compared to Europe. More disaggregated data for the 1930s reveal that in Europe, cinema was an inferior good, in the US it was a luxury, and that in Europe, live entertainment was just above a normal good, while in the US it was a strong luxury. Comparative analysis of consumption differences suggests that one-thirds of the US/UK difference and nearly all of the UK/France difference can be explained by differences in relative price (‘technology’), and all of the US/France difference by differences in preferences (‘taste’). These findings suggest a strong UK comparative advantage in live entertainment production. Using informal comparative growth analysis, the paper finds that cinema consumption was part of a large boom in expenditure on a variety of leisure goods and services; over time, by an evolutionary process, some of these goods, such as cinema and radio, formed the basis of dominant consumption habits, while others remained relatively small. The emergence of cinema, then, was led to a considerable extent by demand, which, through an evolutionary process, was directed towards increasing consumer expenditure on spectator entertainment.
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Bibliographic InfoPaper provided by London School of Economics and Political Science, Department of Economic History in its series Economic History Working Papers with number 22316.
Length: 64 pages
Date of creation: Jun 2007
Date of revision:
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Postal: LSE, Dept. of Economic History Houghton Street London, WC2A 2AE, U.K.
Phone: +44 (0) 20 7955 7084
Web page: http://www.lse.ac.uk/economicHistory/
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Find related papers by JEL classification:
- N0 - Economic History - - General
- O52 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - Europe
- O51 - Economic Development, Technological Change, and Growth - - Economywide Country Studies - - - U.S.; Canada
- B1 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925
- L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
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- Bakker,Gerben, 2008.
Cambridge University Press, number 9780521898546, October.
- Gerben Bakker, 2003. "Building Knowledge about the Consumer: The Emergence of Market Research in the Motion Picture Industry," Business History, Taylor & Francis Journals, vol. 45(1), pages 101-127.
- Horrell, Sara, 1996. "Home Demand and British Industrialization," The Journal of Economic History, Cambridge University Press, vol. 56(03), pages 561-604, September.
- Gerben Bakker, 2003. "The decline and fall of the European film industry: sunk costs, market size and market structure, 1890-1927," Economic History Working Papers 22366, London School of Economics and Political Science, Department of Economic History.
- Gerben Bakker, 2004. "At the origins of increased productivity growth in services. Productivity, social savings and the consumer surplus of the film industry, 1900-1938," Economic History Working Papers 22348, London School of Economics and Political Science, Department of Economic History.
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