Price elasticity and other factors of demand for a Dutch theatre

Using the 2004-2013 sales data of a Dutch theatre, I estimate demand for the performing arts. Particularly, I investigate ways to derive Price Elasticity of Demand (PEoD) from revealed preference using panel data and analyze the data on different levels of aggregation (i.e. per month, per performance and per artist). First, I examine the effect of performance characteristics (i.e. nth time performed, premiere, uniqueness, reprise, weekend) on demand. Secondly, in an attempt to find a more detailed explanation for the decline in theatre visits since 2008, the start of the financial crisis, I find that consumer trust does not significantly influence demand. Because during this crisis the government applied a higher VAT on performing arts, I was able to estimate the decrease in theatre visits in the short runas a consequence of the overall higher VAT, ignoring heterogeneity, in determining price of theatre. Finally, I attempt to control for the heterogeneity of the performances (in terms of popularity and artist) and succeed to some extent; by constructing a measure for popularity from search engine data and using a weighted average of PEoD estimates per artist, the quality differences between performances are partially included in the model for estimating demand.