TAILIEUCHUNG - The Evolution of Entertainment Consumption and the Emergence of Cinema, 1890-1940

In the short-run, however, substantial differences existed. During the First World War entertainment expenditure moved in opposite directions in France and Britain and remained stable in the US. During the great depression US real entertainment expenditure shrunk substantially, while European levels remained stable. The French expenditure level was substantially lower than in the other two countries, about a fifth in 1938 using exchange rates, although the difference is difficult to quantify because of devaluation of the franc and purchasing power parity issues. French expenditure also fluctuated more in the short term. . | Working Papers No. 102 07 The Evolution of Entertainment Consumption and the Emergence of Cinema 1890-1940 Gerben Bakker Gerben Bakker London School of Economics June 2007 Department of Economic History London School of Economics Houghton Street London WC2A 2AE Tel 44 0 20 7955 7860 Fax 44 0 20 7955 7730 The Evolution of Entertainment Consumption and the Emergence of Cinema 1890-1940 Gerben Bakker Abstract This paper investigates the role of consumption in the emergence of the motion picture industry in Britain France and the US. A time-lag of at least twelve years between the invention of cinema and the film industry s take-off suggests that the latter was not mainly technology-driven. In all three countries demand for spectator entertainment grew at a phenomenal rate far more still in quantity than in expenditure terms. In 1890 amusements and vacation was a luxury service in all three countries. Later US consumers consumed consistently more cinema than live compared to Europe. More disaggregated data for the 1930s reveal that in Europe cinema was an inferior good in the US it was a luxury and that in Europe live entertainment was just above a normal good while in the US it was a strong luxury. Comparative analysis of consumption differences suggests that one-thirds of the US UK difference and nearly all of the UK France difference can be explained by differences in relative price technology and all of the US France difference by differences in preferences taste . These findings suggest a strong UK comparative advantage in live entertainment production. Using informal comparative growth analysis the paper finds that cinema consumption was part of a large boom in expenditure on a variety of leisure goods and services over time by an evolutionary process some of these goods such as cinema and radio formed the basis of dominant consumption habits while others remained relatively small. The emergence of cinema then was led to a considerable extent by demand which .

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