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Uncovering audience preferences for concert features from single-ticket sales with a factor-analytic random-coefficients model

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  • Kamakura, Wagner A.
  • Schimmel, Carl W.

Abstract

To better plan their programs, producers of performing arts events require forecasting models that relate ticket sales to the multiple features of a program. The framework we develop, test and implement uncovers audience preferences for the features of an event program from single-ticket sales while accounting for interactions among program features and for preference heterogeneity across markets. We develop a factor-analytic random-coefficients model that overcomes four major methodological challenges. First, the historical data available from each market is limited, preventing the estimation of models at the market level and requiring some form of shrinkage estimator that also takes into account the diversity in preferences across markets as well as the fact that preferences for the many (26 in our application) program features are correlated across markets, requiring the estimation of a large covariance matrix for these preferences across markets. Our proposed factor-analytic regression formulation parsimoniously captures the principal components of the correlated preferences and provides shrinkage estimates at the individual market level. The second challenge we face is the fact that orchestras differ on how they sell season subscriptions, leading to substantial unobserved effects on ticket sales across orchestras; an added benefit of our random-coefficients approach is that it incorporates a random effect that captures any shift in the dependent variable caused by unobservable factors across all events in each individual market, such as the unobservable effect of season subscriptions on single-ticket sales.

Suggested Citation

  • Kamakura, Wagner A. & Schimmel, Carl W., 2013. "Uncovering audience preferences for concert features from single-ticket sales with a factor-analytic random-coefficients model," International Journal of Research in Marketing, Elsevier, vol. 30(2), pages 129-142.
  • Handle: RePEc:eee:ijrema:v:30:y:2013:i:2:p:129-142
    DOI: 10.1016/j.ijresmar.2012.09.005
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    References listed on IDEAS

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    1. Charles B. Weinberg, 1986. "Arts Plan: Implementation, Evolution, and Usage," Marketing Science, INFORMS, vol. 5(2), pages 143-158.
    2. Currim, Imran S & Weinberg, Charles B & Wittink, Dick R, 1981. "Design of Subscription Programs for a Performing Arts Series," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 8(1), pages 67-75, June.
    3. Rutger D. van Oest & Harald J. van Heerde & Marnik G. Dekimpe, 2010. "Return on Roller Coasters: A Model to Guide Investments in Theme Park Attractions," Marketing Science, INFORMS, vol. 29(4), pages 721-737, 07-08.
    4. Swamy, P A V B, 1970. "Efficient Inference in a Random Coefficient Regression Model," Econometrica, Econometric Society, vol. 38(2), pages 311-323, March.
    5. Daniel S. Putler & Shilpa Lele, 2003. "An Easily Implemented Framework for Forecasting Ticket Sales to Performing Arts Events," Marketing Letters, Springer, vol. 14(4), pages 307-320, December.
    6. Train,Kenneth E., 2009. "Discrete Choice Methods with Simulation," Cambridge Books, Cambridge University Press, number 9780521747387, January.
    7. Charles B. Weinberg & Kenneth M. Shachmut, 1978. "ARTS PLAN: A Model Based System for Use in Planning a Performing Arts Series," Management Science, INFORMS, vol. 24(6), pages 654-664, February.
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    Cited by:

    1. Jasmin Droege, 2022. "First impression biases in the performing arts: taste-based discrimination and the value of blind auditioning," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 46(3), pages 391-437, September.
    2. Pei-Hsuan Tsai & Chin-Tsai Lin, 2018. "How Should National Museums Create Competitive Advantage Following Changes in the Global Economic Environment?," Sustainability, MDPI, vol. 10(10), pages 1-20, October.
    3. Jasmin Droege, 2019. "First Impression Biases in the Performing Arts: Taste-Based Discrimination and the Value of Blind Auditioning," Economics Series Working Papers 892, University of Oxford, Department of Economics.
    4. Kwak, Kyuseop & Duvvuri, Sri Devi & Russell, Gary J., 2015. "An Analysis of Assortment Choice in Grocery Retailing," Journal of Retailing, Elsevier, vol. 91(1), pages 19-33.
    5. Kamakura, Wagner A. & Kwak, Kyuseop, 2020. "Menu-choice modeling with interactions and heterogeneous correlated preferences," Journal of choice modelling, Elsevier, vol. 37(C).

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