Abstract
We provide new evidence of pollution avoidance in the movie theater market. Our analysis is based on a unique data set of high-frequency movie ticket sales in China at the movie- and city-level during 2012-2014. We estimate that one pollution day reduces the market share of a movie by 2.26%, other things being equal. On average, the popular movies are inelastic to air pollution. However, as air quality deteriorates, even the blockbuster movies start to suffer a box-office loss during the heavy pollution episodes. Our results suggest that air pollution suppresses demand for a consumer sector in a largely indoor environment.
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