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It’s not the economy, stupid! External effects on the supply and demand of cinema entertainment

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  • M. Rimscha

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Abstract

The paper addresses whether the state of the economy impacts the supply of and demand for cinema entertainment. A literature review on the drivers of cinema supply and demand is provided, and two competing hypotheses are extracted. Economic downturns could either lead to a sober mood and drive the interest in serious genres or drive the need for distraction leading to an increased interest in feel-good or action movies. However, characteristics of the movie industry suggest that economic key factors have only limited effects on supply and demand. A time series analysis of supply and demand in three major European markets indicate that demand is unrelated to the state of the economy. In aggregate, the demand does not instruct supply. Fluctuations in individual movie quality superpose potential effects of the economic context on the aggregated demand. Simultaneously, a focus on film as art superposes potential effects of the economic context on the supply. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • M. Rimscha, 2013. "It’s not the economy, stupid! External effects on the supply and demand of cinema entertainment," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 37(4), pages 433-455, November.
  • Handle: RePEc:kap:jculte:v:37:y:2013:i:4:p:433-455
    DOI: 10.1007/s10824-012-9192-4
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    References listed on IDEAS

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    More about this item

    Keywords

    Movie industry; Cinema demand; Genre; Consumer confidence; Economic growth; Historic events; L82; C23;

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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