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Demand for movies in Europe and the effects of multiplex diffusion: a panel approach

Author

Listed:
  • Orietta DESSY
  • Marco GAMBARO

Abstract

In this paper we try to test the role of multiplex. While usually multiplex is analysed in supply side since it can reduce the cost of exhibition through scale economies in several function, we focus on demand side. The positive role of multiplex is related to the risk reduction of the audience and the improved condition of new theatres. The possible negative role is related to the competition of big multiplex chains towards traditional theatres that can be moved out of market thus reducing eventually theatres density and overall supply. We explore the movie demand evolution in Europe with a data set of 15 countries from 1989 to 2003. We estimate with a panel approach a simple demand function of film exhibition with yearly tickets per inhabitant as dependent variable where as expected price coefficient is negative and income coefficient is positive. Multiplex diffusion, indicated as the percentage of multiplex seats over total seats, appears to be moderately positive and is 1% significant. The results are robust to different model specification.

Suggested Citation

  • Orietta DESSY & Marco GAMBARO, 2009. "Demand for movies in Europe and the effects of multiplex diffusion: a panel approach," Departmental Working Papers 2009-003, Department of Economics, Management and Quantitative Methods at Università degli Studi di Milano.
    • Handle: RePEc:mil:wpdepa:2009-003
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    More about this item

    Keywords

    Consumer economics; empirical analysis; industry studies; performing arts;
    All these keywords.

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L92 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Railroads and Other Surface Transportation

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