Paper Information

Journal:   SOCIAL WELFARE   SUMMER 2007 , Volume 6 , Number 25; Page(s) 301 To 320.
 
Paper: 

THE ESTIMATION OF HOUSEHOLD DEMAND FOR GOING TO CINEMA IN PROVINCES OF IRAN

 
Author(s):  MOUSAEI M.*, SHIANI M.
 
* 
 
Abstract: 

Objective: The demand and consumption of cultural products in Iran including movies and going to cinema will rise in future because average economic growth rate in recent years in Iran has been 5 present and this means the demand for going to cinema will rise in future and since government protects movie making and distribution in Iran and pay them benefits or independenty act in this area, the studay of factors influencing household demand and income and price elasticities, and price of related products will help policy makers to respond to increasing demand for cinema and provide facilities and conditions to meet futurer demands.

Method: In this article we use the Almost Ideal Demand System, proposed by Deaton and Muellbauer (1980) to estimate household demand for cinema. The main reason why Almost Ideal Demand System is used is for its simplicity which enables researchers to test homogencity or heterogeneity restrictions and symmetries. The provinces under study are: 1- Booshehr; 2- Kohgilooyeh va Boyrahmad; 3- ChaharMahalo Bakhtiary; 4- Isfahan; 5- Ham; 6- Fars; 7- Ghazvin; 8- Gilan; 9- Hamedan; 10- Hormozgan; 11- Kerman; 12- Kermanshah; 13- Khorasan, 14- Kurdistan; 15- Lorestan; 16- Markazi; 17- Mazandaran; 18- Semnan; 19- Sistan; 20- Tehran; 21- Yazd; 22- Zanjan; 23- Eastern Azerbaijan; 24- Western Azerbaijan. Finding: In this article the demand functions for going to cinema, in different provinces, are estimated, based on the statistics and data pertaining to household expenditures. Considering different formulas of price and income elasticity, the price and income elasticity calculated for all different provinces. According to the obtained resultants, with exception of Isfahan, Hormozgan, Kerman, Kurdistan, Mazandaran and Eastern Azerbaijan, the price elasticity is less than one, which means demand is not sensitive to the price variations. The same elasticity for the entire country is -0.91 which is the almost equal to one and shows low elasticity of the commodity in household consumption. The amount of the elasticity shows that in case of a 100% increase in the ticket price for cinema, keeping other factors constant, demand for going to cinema would be decreased by 91 percent. Cross elasticity of price for journals and cinema in 9 provinces of Kohgilooyeh va Boyrahmad, Chahar Mahalo Bakhtiary, Isfahan, Ham, Fars, Gilan, Hamedan, Yazd and Zanjan are negative, which means these two commodities could substitute each other in consumption.

But, in other provinces the elasticity is positive; that means these two commodities complementeach other in consumption. The important point is that in both states the absolute value of the elasticity is very small and almost zero that means the relation between journals and cinema is very weak. The same elasticity for the entire country is -0.12 that means in the country, in general, two commodities of cinema and journals substitute each other in consumption. In fact, if the journal price is increased by 100%, the demand for cinema is reduced by 11%.

Crossed elasticity of price between book and cinema, in every province, is negative. This means in all the provinces these two commodities substitute for each other. This elasticity for provinces of Chaharmahalo Bakhtiary, Isfahan, Fars, Gilan, Hamedan, Kurdistan, Lorestan, Tehran and Zanjan is more than other provinces. The amount of the cross elasticity between the two commodities in demand function of cinema in the entire country is almost-47% that shows if book price increases by 100%and all other factor are kept constant, demand for cinema will decrease by 47%. In other words these two goods are complementary in consumption.

The income elasticity in each of the provinces is positive; it is between zero and one. The income elasticity expresses the degree of sensitivity of demand in proportion to variations in household income. The amount of income elasticity for this commodity in the entire country is equal to 0.57 that means if income of a household increases by 100%, demand for this commodity would increase by 57%. On this basis, this is a necessary commodity and if the household income increases, the expenditures for cinema would increase by a lesser amount.

Result: Noting income elasticity of household demand for cinema and the average growth rate in recent years ahead, it is forecasted that the following income rise of about 2.1 times, (170 percent growth of incomes), demand for cinema will rise 96.9 percent (about 2 times) in fact, if government and policy makers want to meet this increase in demand, it is necessary to develop and increase cinemas and related facilities and conditions.
 
Keyword(s): ALMOST IDEAL DEMAND SYSTEM, DEMAND FOR GOING TO CINEMA, IRAN, MOVIE INDUSTRIES
 
References: 
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