Determinants of demand for cultural experience goods: an application to the market for books
thesisposted on 29.03.2022, 03:28 authored by Paul Crosby
This thesis aims to contribute towards the economic literature on the consumer choice of cultural goods. A theoretical model of demand that distinguishes `cultural experience goods' from other `experience goods' is developed. Treating the cultural nature of a good as distinct from other factors known to influenceconsumer choice (such as a good's experiential nature, the role of taste development and the impact of technological change) permits the examination of how its presence not only influences demand in general but also how this influence varies across different consumer groups. This thesis makes two distinct empirical contributions, both of which relate to the chosen category of cultural experience goods, books. Firstly, in order to provide empirical support to the widely accepted theoretical proposition that cultural goods have the potential to embody both a cultural and economic value, a unique survey of readers is conducted. Assessments of a variety of cultural value components along with measurements of willingness to pay for books written by a selection of renowned authors were collected from survey respondents. Econometric analysis of these valuations revealed that readers are able to put a price on a book's ability to stir the imagination. However, a number of other cultural value dimensions that were highly valued by readers remained resistant to monetary evaluation. The second empirical contribution of this thesis relates to the development of a stated preference discrete choice experiment in order to test the predictions of the theoretical model of demand. A total of 242 Australian readers each completed 12 choice tasks resulting in the collection of 2904 choice observations. Respondents were also asked a series of additional questions regarding their socio-demographic characteristics and book reading habits. Binary logit, multinomial logit and latent class models were estimated from the survey data. Results for the hypotheses relating to the cultural nature of a good provide evidence to suggest consumers are willing to pay a `premium' for goods of a cultural nature. However, this willingness to pay varies considerably across different consumer groups. A variety of other hypotheses relating to a good's experiential nature, the role of taste development in cultural good consumption and the impact of new consumption formats are also examined in detail. The conclusion of this thesis emphasises the importance of accounting for the cultural nature of a good in models of demand and suggests how the results can be used by cultural practitioners and industry stakeholders alike to gain a better understanding of how consumers make their cultural experience good purchasing decisions. Ideas for further research are also provided.