Why does popcorn cost so much at the cinema?


You can thank the ethanol boom for the 40% rise in the price of your movie popcorn. Going green is resulting in my green going!

However, there is more to the popcorn story. Physorg.com has an interesting report about a study of movies and concessions by economists from Stanford and UC Santa Cruz. They found that the willingness of some viewers to pay outrageous prices for the oily popcorn goodness serves to hold down ticket prices for cheapskates like me.

Not a great surprise. However, they also found that viewers of unpopular movies tend to buy more concessions, helping to offset the shortfall on ticket sales. This argues against the idea of ticket price elasticity, i.e. charging more for popular movies than dogs, as it could have an inverse affect on concession sales.

They also found that those who purchased tickets online, and those who came in groups, spent more on snacks. Since 40% of the theater's net comes from the concession stand, look for movie houses to push group sales and online ordering to bring in more munchers.

We who like to watch on the cheap owe a pat on the back to those of you standing in line for popcorn, in thanks for subsidizing our ticket price with your appetite. But please chew quietly.