Rational addiction and cultural goods: the case of the Italian theatregoer

Concetta Castiglione and Davide Infante ()

No AWP-03-2015, ACEI Working Paper Series from Association for Cultural Economics International

Abstract: This paper tests whether demand for theatre in Italy is consistent with the model of rational addiction presented in Becker and Murphy (1988). Data from a novel 34-year panel on regional annual theatre attendance are used to estimate market demand. Four models are applied to investigate the demand function, and all of these also include per capita income and other control variables as regressors. The first two models are estimated to check whether theatregoers are myopically addicted to theatre. The results suggest that the theatre is an addictive good because past consumption (and prices) significantly raises the marginal utility of current consumption. The third model tests the rational addiction hypothesis, which assumes that future attendance also influences current attendance, whilst past and future prices influences current attendance only indirectly through their impact on past and future attendance. However, our most highly specified model, introducing past and future prices, demonstrates that Italian theatregoers are not myopic but fully rational as outlined in Becker and Murphy (1988). The results demonstrate that the rational addiction hypothesis is applicable not only to "harmful" addictions such as alcohol, cigarettes, and drug consumption, but also to "beneficial" addictions, such as theatre attendance.

Keywords: Cultural Theatre demand; rational addiction; panel data; Italy (search for similar items in EconPapers)
JEL-codes: C23 D12 Z10 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2015-05, Revised 2015-05
New Economics Papers: this item is included in nep-cul
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://files.culturaleconomics.org/papers/AWP-03-2015.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cue:wpaper:awp-03-2015

Access Statistics for this paper

More papers in ACEI Working Paper Series from Association for Cultural Economics International Contact information at EDIRC.
Bibliographic data for series maintained by Paul Crosby ().