The Demand for Cinema in Sweden: An Application of Proportional Odds Model

ABSTRACT

This article examines the determinants of demand for cinema using a randomly drawn sample of the movie-going population in Sweden. A proportional odds model is applied to capture the natural ordering of dependent variables and any inherent nonlinearities. The findings show that individual demand for cinema depends on gender, age, educational attainment, income, marital status, critical reviews, word of mouth, and willingness to pay. The fact that cinema demand is correlated with economic and socio-demographic variables has important implications for theoretical and empirical research in cultural economics and human decision-making processes.

KEYWORDS:

• Advertising
• demand
• film industry
• nonlinear
• proportional odds model
• willingness to pay

Acknowledgments

The author would like to thank two anonymous referees for valuable and helpful comments. Any remaining errors are the author's.

Notes

1. The data come from SCB, Sweden (2015).

2. If the variable in question has an exactly linear relationship with the outcome, you do lose information by making a continuous variable into a categorical one. Treating the variable as continuous allows the linear component of the relationship to be estimated, but the categorical version allows much more complicated relationships to be captured.

3. Gray (1995) also applies logit models to arts participation.