Theatre Design & Technology - Feb 1966 - 13

not take into account shows held over from previous
seasons. Because of the control which exists over
ticket pricing, holdovers do frequently adjust their
prices to those prevailing at the time, minimizing
their effect on the given season. Much more important in terms of reactions to prices on the part
of consumers, the prices computed by our method
measure the average prices charged for the product
not necessarily received. If as often stated, the
best seats sell most rapidly, the average price
received may actually be higher than our computed
average.

What have the price increases done for the industry?
They have produced increasing gross income. In
Graph 2 the contribution of higher ticket prices to
the rising income of Broadway theatre is graphically
demon s trated.
The correlation is strong enough between the percentage changes in ticket prices and the income of
the industry to indicate that ri sing ticket prices
are the most important single cause of increases
in income. That is to say, higher prices have tended
to produce income increases rather than falling
attendance, and income increases have not been
due to increasing attendance.

The results of our computations for the period
1954-55 through 1960-61 are shown in Graph 1,
along with Price Indices for theatre tickets plotted Another positive correlation of significance is a
against Price Indices for consumer goods and compari son of changes in per capita income in the
metrvpolitan area 7 with Broadway theatre gross
reading and recreation.
income. Although theatregoers Come from beyond the
metropolitan area, the relationship between per
capita income and personal expenditures on the
theatre is close enough to indicate that the percentage of income spent on theatre remained
relatively constant (Graph 3).

The construction of an index for per capita spending
on the theatre, as seen in Graph 4, emphasizes
the general tendency to spend more on theatre as
prices go up and to increase the expenditure roughly
in proportion to the price increase itself.

READING' RfCREA liON

1l'J
lhOEX

....................................................

11:

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'"" .....~,,.

100

YEAR

1957

...

----------

19)5

ALL

.. - .. - - - - CCNS:J.. ERGOODS

1961

1959

THEA.TRE

SE.:..SON

Pf5!S5

AYER.t.(;E
TICKET

B7:)

~H.:

PRICE

GRAPH 1: Comparison of Indices for Broadway
Theatre Prices, Consumer Goods Prices and All
Reading and Recreation Prices, New York City.
1954-61. 5

Although all indices move in the same direction,
the rate of price increase recorded for theatre is
far in excess of that for consumer goods in general.
It is closer in performance to the index for reading
and recreation, but still exceeds the rate of change
found under this heading. And it must be remembered
that ti cket pri ce s are one sign ifi cant component of
the New York City index for reading and recreation.
Thus, Broadway ticket prices do not follow the
pattern of general inflation in New York City;
rather they tend to lead.

february 1966

In fact, the positive relationship between price
changes and personal expenditures on Broadway
theatre is stronger than indicated in the indices
above. For example, 1955-56 shows a decrease in
in average ticket prices. If, however, we analyze
the average by type of show (categori es "mu s i cal",
"drama", "comedy" and "miscellaneous"), 195556 recorded an increase in price for each class of
show over the previous season. 10 Again, if the
average of price each individual show is examined,
prices increased between the two seasons. 1l How
may the apparent contradiction be explained?
The proportion of mu sica Is pre sen ted decreased
sufficiently so that the average price of all shows
declined. Even so, the consumer actually faced
higher price scales in 1955-56 than in 1954-55. He
also reacted predictably--he paid the higher prices
and increased his spending on theatre.
This high degree of inelasticity of demand can be
lexamined directly, once we consider attendance
. figures. Unfortunately these must also be estimated
since they are avai lable neither from the industry
nor from government sources. Before explaining
our own approach, it would be worthwhile to examine
figures from an earlier period. Graph 5 shows the
attendance figures arrived at in the "Saxon Report"
of 1954, for the period 1944-52. 12 The figures,
based on the number of copies of Playbills printed,
reveal a constantly-declining attendance, reaching
a low of 8.4 mi Ilion in 1951-52.
We have estimated attendance for each season, 195455 through 1960-61, by dividing the actual gross
income each season by the average price of a

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