The effect of price changes on the box office for the cinema industry

: results from randomized field experiment

Abstract

The cinema industry is a highly competitive and dynamic market. Due to the features of the market, price changes have shown a growing interest in this sector. These strategies profoundly influence consumer behavior, consumption, and, consequently, box office revenue. Previous research has found a negative influence on the relationship of price with revenue. This thesis will deliver the primary outcomes of a field randomized experiment conceived to examine the effect of price changes on revenue inside the cinema industry. The experiment consisted of varying ticket prices for different rooms, with some rooms serving as control groups. For the data to be categorized as reliable, accurate, reliable and ensure robust outcomes, there was the need to prepare the data. Four regression models were built on understanding demand and revenue elasticity in the cinema theatre, examining the relationship between the number of tickets sold and price and revenue and price. Two simple regression models were created one for each result and two for multiple regression (expansion of simple regressions with adding covariates). These findings contribute to expanding the knowledge inside the industry. The results from this study will be a worthy resource not only inside the cinema industry but also for future analyses on consumption, dynamic prices, and the decision-making process of other industries.

Date of Award	16 Oct 2023
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Filipa Reis (Supervisor)