Rationally Addicted to Cinema and Tv? An empirical investigation of Italian consumers

Abstract

A number of papers have empirically investigated the rational addiction model proposed by Becker and Murphy (1988) by using data on different harmful drugs; but also activities independent of a biological or pharmaceutical dependency have been analysed, such as cinema. The purpose of this paper is to extend previous works on cinema demand by including two addictive consumption goods, cinema and television. To this aim a panel-data GMM methodology is used to estimate a dynamic model of double rational addiction as proposed by Bask and Melkersonn (2004) using a sample of monthly time- and cross-sectional series covering the 20 Italian regions over the period 2000-2002.