Performing Arts and Cinema Demand: Some Evidence of Linder's Disease

Abstract

This study presents some results for performing arts demand in Norway, obtained by means of a complete demand system with performing arts (dance, theatre and concert performances) and cinema as two of several cultural/media goods. The calculations are carried out on the basis of consumer survey data for more than 21,600 households from the period 1986–2002. The results provide a fairly firm basis for concluding that the demand for performing arts in Norway is income elastic while cinema is income inelastic. However, since both are time-intensive in consumption, they are subject to Linder's disease which is due to a shadow value of leisure increasing with income. This implies a negative bias in the income elasticity as estimated by us. Our calculations suggest that the bias has become bigger in the period analyzed, i.e., that Linder's disease has become more serious for both performing arts and cinema over time. The results for other cultural/media goods support this finding. The results do also indicate that the demand for both the performing arts and cinema is price inelastic, and that they generally are substitutes to each other as well as to other cultural/media goods. One notable exception is performing arts and audio-visual media which, according to our findings, seem to be complements suggesting that decreases in the prices of AV media stimulate the demand for performing arts.

JEL Classification: D1, Z1