The demand for cinema in the United Kingdom

Abstract

J^emand functions for leisure activities such as sport (Cairns, Jennett & Sloane, 1986) and theatre-going (Moore, 1968, Withers, 1980, Kelejian & Lawrence, 1980) have been estimated by economists. Relatively little work has been done on the cinema (Spraos, 1962, Cameron, 1986, Cameron, 1988). Cinema attendances have fallen rapidly since the 1950's. As this accompanied a rapid growth in incomes we might suspect that the cinema is an inferior good. Higher income may have caused a switch to activities such as opera and ballet which might be superior goods (Browning & Sorrell, 1954, Halsey, 1972, Throsby and Withers, 1979). Household expenditure survey data for Australia (Throsby & Withers, 1979, p.104) and Great Britain (Cameron, 1986, p.52) shows a consistent increase in spending on cinema attendance as income rises suggesting that it is a normal good. Attempts to isolate the income elasticity of demand for cinema, using econometric methods, have failed to find anything of statistical significance whether using cross-section data (Spraos, 1962) or time series (Cameron, 1986, 1988). This paper uses pooled cross-section time-series data which provides a well defined positive income elasticity so long as a log-linear functional form is used.