The impact of social distancing on box-office revenue: Evidence from the COVID-19 pandemic

In Kyung Kim

doi:10.1007/s11129-020-09230-x

The impact of social distancing on box-office revenue: Evidence from the COVID-19 pandemic

Research output: Contribution to journal › Article › peer-review

Abstract

In this paper, I study the short-run effect of social distancing due to the COVID-19 outbreak on movie demand and box-office revenue. Using longitudinal data on the Korean movie theater industry, I first estimate a nested logit model of movie demand, and then quantify the revenue loss in the industry. Estimation results reveal that the revenue loss due to the decrease in underlying movie demand is approximately 52 million dollars nationwide during the first five weeks after the outbreak, implying a 34 percent decrease in sales. The results also suggest an additional 42 million dollars were lost as the delay of some major movies lowered the overall quality of available movies in the market.

Original language	English
Journal	Quantitative Marketing and Economics
DOIs	https://doi.org/10.1007/s11129-020-09230-x
Publication status	Accepted/In press - 2020

Keywords

COVID-19
Movie theater industry
Nested logit model
Social distancing

ASJC Scopus subject areas

Economics, Econometrics and Finance (miscellaneous)
Marketing

Access to Document

10.1007/s11129-020-09230-x

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Cite this

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title = "The impact of social distancing on box-office revenue: Evidence from the COVID-19 pandemic",

abstract = "In this paper, I study the short-run effect of social distancing due to the COVID-19 outbreak on movie demand and box-office revenue. Using longitudinal data on the Korean movie theater industry, I first estimate a nested logit model of movie demand, and then quantify the revenue loss in the industry. Estimation results reveal that the revenue loss due to the decrease in underlying movie demand is approximately 52 million dollars nationwide during the first five weeks after the outbreak, implying a 34 percent decrease in sales. The results also suggest an additional 42 million dollars were lost as the delay of some major movies lowered the overall quality of available movies in the market.",

keywords = "COVID-19, Movie theater industry, Nested logit model, Social distancing",

author = "Kim, {In Kyung}",

note = "Funding Information: I thank two anonymous referees and Thomas Otter, the Editor, for excellent comments and suggestions that helped to improve this paper. Financial support from the Seed Program for Korean Studies through the Ministry of Education of the Republic of Korea (AKS-2018-INC-2230011) and the Small Grant Program at Nazarbayev University (SHSS2018004) is gratefully acknowledged. Publisher Copyright: {\textcopyright} 2020, Springer Science+Business Media, LLC, part of Springer Nature. Copyright: Copyright 2020 Elsevier B.V., All rights reserved.",

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PY - 2020

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N2 - In this paper, I study the short-run effect of social distancing due to the COVID-19 outbreak on movie demand and box-office revenue. Using longitudinal data on the Korean movie theater industry, I first estimate a nested logit model of movie demand, and then quantify the revenue loss in the industry. Estimation results reveal that the revenue loss due to the decrease in underlying movie demand is approximately 52 million dollars nationwide during the first five weeks after the outbreak, implying a 34 percent decrease in sales. The results also suggest an additional 42 million dollars were lost as the delay of some major movies lowered the overall quality of available movies in the market.

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