Price salience in opinion polls and observed behavior: The case of Spanish cinema

Abstract

In the market system, a necessary condition for equilibrium is that prices convey all relevant information. However, apparently biased responses about prices in survey polls may cast doubt on the way consumers understand prices. It has been argued that survey answers, based on salient aspects of products, are mostly driven by intuition and may be inaccurate. To investigate this, we take advantage of a VAT rise on cultural products that took place in Spain in 2012. Cinema prices were expected to increase substantially, but the tax was eventually absorbed by exhibitors, keeping average prices unchanged. Using the Spanish Survey on Cultural Habits and Practices (2010–2011 and 2014–2015), we find that, as price salience increased, declared concern with prices rose. However, average prices did not change and cinema attendance, which involves more deliberation, remained stable. Therefore, expenditure decisions, grounded on reflective thinking, rule out potentially biased elements of price perceptions.