Cheap Tuesdays and the demand for cinema

Nicolas de Roos and Jordi Mckenzie ()

International Journal of Industrial Organization, 2014, vol. 33, issue C, 93-109

Abstract: Many movie markets are characterised by extensive uniform pricing practices, hampering the ability to estimate price elasticities of demand. Australia presents a rare exception, with most cinemas offering cheap Tuesday ticket prices. We exploit this feature to estimate a random coefficients discrete choice model of demand for the Sydney region in 2007. We harness an extensive set of film, cinema, and time-dependent characteristics to build a rich demand system. Our results are consistent with a market expansion effect from the practice of discounted Tuesday tickets, and suggest that cinemas could profit from price dispersion by discounts based on observable characteristics.

Keywords: Motion pictures; Cinema demand; Discrete choice model; Market expansion (search for similar items in EconPapers)
JEL-codes: L13 L82 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:33:y:2014:i:c:p:93-109

DOI: 10.1016/j.ijindorg.2014.02.004

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