Dear Economist

Shifting popcorn

Dear Economist,

When I go to a restaurant a dish that costs more to make – perhaps lobster or the product of an expensive chef’s imagination – costs more to purchase. The same is true when I go to a clothes store.

However, when I go to see a movie at my local cinema, no matter what the film, no matter how much it cost to make, it costs the same to see.

As I only go to big-budget flicks that have been praised to the rafters, I feel I am being subsidised by the poor folks who are watching cheap run-of-the-mill pictures. Why don’t movie theatres have adjustable pricing?

Arthur Spirling, Rochester, NY

Dear Mr Spirling,

You are confused. You are not consuming a film but a film screening, and film screenings cost the same to produce no matter what is in the projector. The price of producing the film in the first place is irrelevant.

Nevertheless, there is a puzzle here. While we shouldn’t expect big-budget films to command higher ticket prices, these prices should surely vary in an attempt to get every seat in the house full. It’s not obvious that popular movies should be more expensive: the most popular books tend to enjoy the greatest discounts. But completely uniform pricing is odd…

Continued at ft.com

19th of August, 2006Dear Economist • Comments off