Modelling Preference Heterogeneity for Theatre Tickets: A Discrete Choice Modelling Approach on Royal Danish Theatre Booking Data

This paper analyzes the behavioural choice for theatre tickets using a rich dataset for 2010-2013 from the sale system of the Royal Danish National Theatre. A consumer who decides to attend a theater production faces multiple sources of price variation that depends on: socio-economic characteristics, quality of the seat, day of the performance and timing of purchase. Except for the first case, factors of price differentiation involves a choice by the consumer among different ticket alternatives. Two modelling approaches, namely multinomial logit (with socio-demographic characteristics) and latent class are proposed in order to model ticket purchase behaviour. These models allow us explicitly to take into account consumers' preference heterogeneity with respect to the attributes associated to each ticket alternative In addition, the distribution of the willingness-to-pay (WTP) of choice attributes is estimated. Understanding theatre-goers' choice behaviour and WTP for the quality of seat and the day of performance is important to policy makers and theatre managers in adopting different pricing and marketing strategies.