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A latent class model of theatre demand

Abstract

This paper investigates market segments for theatre demand using a latent class model. The model is applied using data from a stated preference survey implemented in a regional theatre in England. Results allow three classes of theatregoers to be identified. The largest and ‘main class’ comprises mainly affluent people who show a strong preference for main theatre venues, consider reviews of the productions, whether the author is known, and like all types of shows. The second is a ‘popular class’, exhibiting the smallest willingness to pay and manifesting a strong preference for comedies, paying little attention to venues and disliking more sophisticated shows. The third is an ‘intellectual class’ of theatre goers, who exhibit the maximum willingness to pay, and show a strong interest for drama and adaptation of productions, and more independent aesthetic judgement. The study shows the usefulness of latent class models in identifying market segments, a procedure that is relevant to policy makers and theatre managers in setting prices, identifying different kinds of consumers to increase people’s engagement with theatre, and undertaking social analysis of performing arts.

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Notes

  1. 1.

    Abbé-Decarroux and Grin (1992) find that this risk might be a factor of attraction of certain audiences like youngsters since theatre can be more risky and risqué than other performances like opera or concerts.

  2. 2.

    A regression analysis of demand for theatre based on data over an eight year period from individual questionnaires collected after every show in three venues was assembled by Corning and Levy (2002). The analysis provides a list of determinants of demand: price, whether the person is a subscriber or not, quality (measured as ‘reviews’ using an ordinal variable from 1 to 5), type of show (genre), time of performance, and income.

  3. 3.

    Levy-Garbua and Montmarquette (1996) highlight the fact that, apart from known variables such as educational level and income, the availability of time is very important. Thus they found that dummy variables such as owning a dishwasher, and not having children, were significantly correlated with demand.

  4. 4.

    Some authors have tried to use multi-modal continuous distributions by means of polynomial transformations (Scarpa et al. 2008) or conducted systematic comparisons in finite and continuous mixing (Scarpa et al. 2005; Hess et al. 2007), and the results show that on the same dataset, the estimates tend to be equivalent once multi-modality is accounted for.

  5. 5.

    For a discussion about advantages of SP over RP, see Louviere et al. (2000).

  6. 6.

    The experimental design was developed using macros in Excel following Rose and Bliemer (2008).

  7. 7.

    In the literature, it is suggested that ex-ante and ex-post measures of coefficient estimates be displayed when reporting a study (e.g. see Scarpa and Rose 2008). These prior betas were found, specially for price, reviews and word of mouth close to the real estimates from the initial MNL model of focus group responses.

  8. 8.

    This was the chance to participate in a cash draw, with the 1st prize being £50 and two other prizes of £25 each.

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Acknowledgments

This work is funded by the Arts and Humanities Research Council; and the Arts Council England (Grant: AHRC Fellowship in Economic Impact Assessment of Arts and Humanities). We would like to thank Edmund Nickols, Director of Theatre Operations at Northern Stage, for his support of this research. We would also grateful acknowledge the anonymous reviewers whose comments and suggestions greatly enhanced this article.

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Correspondence to Kenneth G. Willis.

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Grisolía, J.M., Willis, K.G. A latent class model of theatre demand. J Cult Econ 36, 113–139 (2012). https://doi.org/10.1007/s10824-012-9158-6

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Keywords

  • Theatre demand
  • Latent class model
  • Willingness-to-pay
  • Market segments

JEL Classification

  • Z11
  • D12
  • C25