Tourism flows and the demand for regional and city theatres in Austria

Abstract

This paper investigates the impact of tourism flows on demand for large regional and city theatres in Austria over the period from 1972 to 2011 (39 years). The results are obtained by applying an aggregated theatre demand function for both residents and tourists. The elasticity of theatre attendance in response to tourism is estimated along with other standard demand variables such as ticket price and income. The quality factors and theatre-specific effects are also included. The tourism flows variables are derived using detailed data set on tourist arrivals and their overnight counts, and they are also split between domestic and foreign tourists. To measure the impact of tourism flows on theatre demand, three alternative theatre markets specifications are considered. The total elasticity of attendance per capita in response to tourism is estimated between 15 and 20 %, indicating that increasing the number of arrivals by two tourists per resident in the relevant market would generate an increase in theatre attendance by 581–680 thousand visitors per year. The role of tourism flows is found to be particularly important for attendance at opera, operetta and musicals as opposed to attendance at drama performances. The analysis also reveals that foreign, non-German tourists have a positive impact on theatre attendance, whereas domestic tourists do not contribute significantly to higher demand for Austrian theatres.

Appendices

Appendix 1

See Table 7.

Table 7 List of Austrian theatres and their location

Appendix 2: Aggregate theatre demand model for residents and tourists

Following Gapinski (1988), we assume that the quantity of cultural experiences demanded by a resident (y _r ) depends on the ticket price (P), price of substitutes (Ps) and his/her disposable income (Inc _r ), and thus, it is equal to: $y_{r} = \alpha_{r} + \alpha_{pr} P + \alpha_{sr} Ps + \alpha_{I} Inc_{r}$ and the quantity of cultural experiences demanded by a tourist (q _t ) is equal to: $q_{t} = \alpha_{t} + \alpha_{pt} P + \alpha_{st} Ps + \alpha_{E} Exp_{t}$ where P and Ps are the ticket price and the prices of substitutes, respectively, and Exp _t is the tourist expenditure. Given R residents and T tourists, the total demand for cultural experiences must be equal to $Y = \sum\nolimits_{r = 1}^{r = R} {y_{r} } + \sum\nolimits_{t = 1}^{t = T} {q_{t} }$ or alternatively can be written as:

$$\begin{aligned} Y & = \alpha_{r} R + \alpha_{t} T + \alpha_{pr} P \cdot R + \alpha_{pt} P \cdot T + \alpha_{sr} Ps \cdot R + \alpha_{st} Ps \cdot T \\ & \quad + \alpha_{I} \sum\limits_{r} {Inc_{r} } + \alpha_{E} \sum\limits_{t} {Exp_{t} } \\ \end{aligned}$$

(2)

Furthermore, assuming that the price coefficients are the same for both residents and tourists (thus α _pr  = α _pt and α _sr  = α _st ) and dividing the Eq. (2) by the number of residents (so that y = Y/R), we obtain the number of cultural experiences per resident which is given by Eq. (3):

$$y = \alpha_{r} + \alpha_{tr} TR + \alpha_{p} (1 + TR)\cdot P + \alpha_{s} (1 + TR)\cdot Ps + \alpha_{i} I + \alpha_{e} E$$

(3)

where I is the income per resident, E is the total tourist expenditures per resident and TR = T/R is the ratio of tourists divided by the number of residents. The shifts coefficient of interest is α _tr and denotes the impact of tourism on theatre attendance per resident.