Cheap Tuesdays and the Demand for Cinema

43 Pages Posted: 23 Mar 2011  

Nicolas de Roos

University of Sydney

Jordi McKenzie

University of Sydney

Date Written: March 9, 2011

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

JEL Classification: L13, L82

Suggested Citation

de Roos, Nicolas and McKenzie, Jordi, Cheap Tuesdays and the Demand for Cinema (March 9, 2011). Available at SSRN: https://ssrn.com/abstract=1789492 or http://dx.doi.org/10.2139/ssrn.1789492

Nicolas De Roos (Contact Author)

University of Sydney ( email )

University of Sydney
Sydney NSW 2006, NC
Australia

Jordi McKenzie

University of Sydney ( email )

Merewether H04
Sydney NSW, 2006
Australia
+61 2 90367816 (Phone)

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