What influences the price of theatre tickets?
At the regular seminar of the GAMES research group, Alina Buzanakova, Research Assistant, participant of Research Training Group “Empirical demand estimation”, presented her paper. She revealed the results of a study, focused on estimation of demand function for the performing art through the example of Perm opera and ballet theatre.
The study was coauthored with Evgeniy Ozhegov, Senior Lecturer of the School of Economics and Finance, Junior Research Fellow of the Group for Applied Markets and Enterprises Studies (GAMES) with the support of Perm Tchaikovsky academic opera and ballet theatre.
The authors of the research studied how changing of ticket prices influences the figures of attendance for different kinds of plays. In the beginning of her report, Alina noted that since a theatre is a cultural institution, not only profit maximization, but also educational aspect is important for it. That’s why the authors of the research faced the task to determine optimal price policy for selling tickets in different zones of the theatre (the stalls, tiered stalls, gallery) depending on the type of performance.
The study was carried out based on the data about tickets sale for 4 theatrical seasons – since 2011-2012 to 2014-2015. The data included such parameters as seat occupancy, ticket price, purchase characteristics, intensity of advertising campaign.
Using the quantile regression method, the authors found out basic indices that influence the demand. Alina told that according to the study results the composite demand for theatrical productions was price elastic, that is, spectators are sensible to changing of ticket prices. At the same time the elasticity index varies for different zones of the theatre. For example, it is minimal for the most expensive and prestigious seats in the stalls.
At the end of the seminar Alina noted that the results of the study allow to give recommendations to the theatre on optimal pricing strategy. It will allow to differentiate ticket prices for different kinds of performances.