Everywhere I look businesses are worried sick about the thought of a recession. Every industry is looking for ways to either cut costs or increase profit margins. Every industry is panicking except one, movies. The first thought that ran through my head when I saw the title of this article was what a bad time for producers to release such a great movie like Indiana Jones. But upon reading the first sentence of the article, I discovered this is actually the best time for great movies. Dating back to the depression people with lower incomes have skimped and saved to visit the theater just to catch a glimpse of their favorite inspirational heroes and heroines. Movies are an inferior good. When people have less income they see more movies. Who would have thought? When money is tight Indiana Jones will come to an encouraging rescue.
5 comments:
Correct me if I'm wrong- Wouldn't movies be an inferior good if people saw more of them when they have less money? While I agree that people like to see movies when times are bad, I think you got your definitions mixed up a tad. Interesting thought though.
Good save Trinity.
Last year I left a well paying job to come back to school in hopes of making more money in the future. Needless to say I now have less discretionary income but the one thing we do more frequently for entertainment is go to the movies. It's less money then the other things we like to do and it still provides a good time. I would have to agree with you.
Again I feel that I must interject some reality and some good sense. In an effort to not offend those that do watch more movies when they have less money I will try and be straight to the point and not beat around the bush. Furthermore, sometimes the truth hurts and its good for you. For example: If the content of this post is actually factual I am wounded by the stupidity of our society. Spending more on perishable goods and services when you earn less makes as much sense as suing fast food restaurants because you ate to much of their food and became outrageously obese. Banks are failing because of such poor financial practices perpetrated by millions of people. In short, spending more when you have less illustrates inferior understanding of basic financial principles, pathetic use of personal financial self-control, and a blatant disregard for logic.
I have my doubts about this. I think that movies probably are inferior, but real revenues have been in decline because of other factors for about 40 years. I'd think this would swamp any effects from inferiority.
As to thefindlay's point, we measure elasticity precisely because people make choices in different ways. Inferior goods exist because your view is in the minority.
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