Cheap Tuesdays and the demand for cinema

Nicolas De Roos*, Jordi McKenzie

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

7 Citations (Scopus)

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.

Original languageEnglish
Pages (from-to)93-109
Number of pages17
JournalInternational Journal of Industrial Organization
Volume33
DOIs
Publication statusPublished - 2014

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