A microeconometric study of theatre demand
We develop a model of theatre demand with learning by consuming, and test some of its implications on a large random sample of theatregoers and non-theatregoers. This seems to be the most comprehensive econometric study of demand for the theatre from individual data. We hypothesize that each time the consumer watches a play, he experiences a degree of pleasant or unpleasant surprise on the basis of which he will revise his future expectations of his own taste. The learning phase is likely to be unusually long for highly differentiated cultural goods. Our set of data contains unique information about the full price and the fixed cost of theatre, the objective quality of the outing, past experience of and taste for the theatre, and consumption of substitute leisure activities such as reading, television and cinema. Our methodology and data enable us to infer price elasticity on survey data from knowledge of theatregoing experience and taste. After controlling for many variables, we conclude that demand for the theatre is price-elastic, which contradicts previous estimates on aggregate time-series data. Moreover, we estimate demand conditional on past attendance after controlling for selectivity bias. Satisfaction reported by consumers after the last play is also estimated and interpreted as an ordinal conditional choice. Copyright Kluwer Academic Publishers 1996
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pollak, Robert A, 1970. "Habit Formation and Dynamic Demand Functions," Journal of Political Economy, University of Chicago Press, vol. 78(4), pages 745-63, Part I Ju.
- Gary S. Becker & Kevin M. Murphy, 1986.
"A Theory of Rational Addiction,"
University of Chicago - George G. Stigler Center for Study of Economy and State
41, Chicago - Center for Study of Economy and State.
- Gapinski, James H, 1986. "The Lively Arts as Substitutes for the Lively Arts," American Economic Review, American Economic Association, vol. 76(2), pages 20-25, May.
- Gapinski, James H, 1984. "The Economics of Performing Shakespeare," American Economic Review, American Economic Association, vol. 74(3), pages 458-66, June.
- Van de Ven, Wynand P. M. M. & Van Praag, Bernard M. S., 1981. "The demand for deductibles in private health insurance : A probit model with sample selection," Journal of Econometrics, Elsevier, vol. 17(2), pages 229-252, November.
- Boyer, Marcel, 1983.
"Rational demand and expenditures patterns under habit formation,"
Journal of Economic Theory,
Elsevier, vol. 31(1), pages 27-53, October.
- Boyer, M., 1981. "Rational Demand and Expenditures Patterns Under Habit Formation," Cahiers de recherche 8133, Universite de Montreal, Departement de sciences economiques.
When requesting a correction, please mention this item's handle: RePEc:kap:jculte:v:20:y:1996:i:1:p:25-50. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Christopher F. Baum)
If references are entirely missing, you can add them using this form.