Abstract
This paper models the interaction between cinema admissions and cinema supply in response to changes in exogenous variables, chiefly competition from television viewing. The relationship is estimated empirically by applying near Vector Autoregression (VAR) techniques to a long run of British annual data from 1950 to 1997. The results indicate that sustained negative shocks to cinema demand throughout most of the period reduced the supply of screens, inducing further falls in admissions and closures until a new equilibrium was attained. More recently, the introduction of multiplex cinemas has interrupted and partially reversed this downward demand-supply spiral.
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Macmillan, P., Smith, I. Explaining Post-War Cinema Attendance in Great Britain. Journal of Cultural Economics 25, 91–108 (2001). https://doi.org/10.1023/A:1007630400082
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DOI: https://doi.org/10.1023/A:1007630400082