Willingness to Pay for Local Public Goods: Some Evidence From the Nonprofit Theatre Sector

Abstract

It is clearly the case that many people may derive option benefits from the embodiment of creativity in cultural products. This article describes a method that can be used to offer more support for a local public good—namely local theatre. This is the application of willingness to pay (WTP) pricing. Survey evidence from two nonprofit regional theatres in the UK were used to examine determinants of the WTP function for local theatre. A WTP equation was estimated and showed the following: Female respondents offered much lower prices; there was a positive influence of income on willingness to pay with a small elasticity; loyalty to the theatre contributed to higher price offers and perceived characteristics poverty of the theatre productions was so strong that it would cancel this out where a person has such feelings. The price terms show that the offered price is linked positively to perceptions of the normal price at the theatre and reasonable prices for other events.