It was mentioned in class that movie tickets are somewhat immune to changes in the economy. I thought this was interesting because I had noticed this myself, particularly after they raised the price of movie tickets by a couple of dollars.
Even though it is quite noticeable that they do seem to poses some sort of resistance to fluctuations in the economy, Im not quite sure why they do. How can something, which I would consider a luxury, do just as well in a recession as it does in good times? Perhaps movie goers have simply placed it at the top of their list. Perhaps AMC 20 gives out some sort of awesome coupons which I am unaware of. Or, could it be that movie patrons are generally effected less by recessions then others, and therefore give an advantage to theatres?
However they manage, I personally find their resilience intriguing. If anyone has any further insight into this I would appreciate it if you posted your thoughts.
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The price elasticity of demand is a function of many things. The variables affecting movies are most notably proportion of income and lack of substitutes. The proportion of income for most movie goers is not much. They is not a lot of entertainment options in the movie price range. Movies play at many times you can see them early and go out later if your older. Furthermore, you can see a movie later if you don't plan on going out. Either way its a rather cheap way to spend two hours
ReplyDeleteEven working at AMC 20 I am shocked at why people still go to the movies. The tickets are expensive and the food is expensive. Yet people still cannot keep themselves away from the cinema. The reason for this is most likely the lack of substitutes as mentioned by another commenter. Besides bowling or going to the mall their is not much of a choice when it comes to leisure activities. Because of this and their desire to see some of the movies, whereas others go to the movie just to go, are all reasons why people still go to the movies.
ReplyDeleteThere is something old-fashioned about going to the movies that will always appeal to society. My wife and I do not go out often but at least a few times a year we have a "date" night at the movies. Are they overpriced...probably. But dinner and a movie have a historical presence within our society that I believe will allow their prices to continue to climb with little effect to consumption.
ReplyDeleteI would agree with Taylor. I believe that there are not very many substitutes to choose from. Going to the movies is too big of part of our culture to stop going. In my opinion there aren't enough movies that are worth paying that much for these days anyway. Personally, I'll wait until most of them come out on Demand or Blue Ray.
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