Demand for Movies in Europe and the Effects of Multiplex Diffusion: A Panel Approach

Universita degli Studi di Milano Working Paper No. 2009-03

13 Pages Posted: 14 Jan 2010

See all articles by Orietta Dessy

Orietta Dessy

University of Milan - Department of Business Policy and Economics

Marco Gambaro

Università degli Studi di Milano - DEPA

Date Written: February 1, 2009

Abstract

In this paper we try to test the role of multiplex in theatrical distribution and movie demand. 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.

Keywords: movies, demand estimation, price elasticity, film industry

JEL Classification: D12

Suggested Citation

Dessy, Orietta and Gambaro, Marco, Demand for Movies in Europe and the Effects of Multiplex Diffusion: A Panel Approach (February 1, 2009). Universita degli Studi di Milano Working Paper No. 2009-03, Available at SSRN: https://ssrn.com/abstract=1176542 or http://dx.doi.org/10.2139/ssrn.1176542

Orietta Dessy

University of Milan - Department of Business Policy and Economics ( email )

Milano, I-20122
Italy

Marco Gambaro (Contact Author)

Università degli Studi di Milano - DEPA ( email )

Via Conservatorio, 7
I-20122 Milano
Italy
+39 02 5032 1501 (Phone)
+39 02 5032 1505 (Fax)

HOME PAGE: http://www.economia.unimi.it

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
73
Abstract Views
553
rank
433,240
PlumX Metrics