SMU SOE Seminar Series (February 12, 2025): Extreme Heat and Consumption in City Centers: Evidence from Movie Box Office Performance

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ABSTRACT

Using daily box office data of Chinese cinemas from 2017 to 2019, this paper finds that extreme high temperature (above 35°C) significantly reduces offline film consumption, and the decline in city center is significantly larger than that in suburban areas. The negative impact of high temperature on consumption decays until the distance between the cinema and the city center reaches 30 to 40 km. Compared with lower-tier cities, high-tier cities are more likely to demonstrate the flattened curve of consumption. The mechanism analysis shows that the above phenomenon can be explained by the “substitution effect” in residents’ consumption choice. Under extreme high temperature, residents are more inclined to choose nearby locations for offline consumptions, which “substitutes” the consumption in the city center under normal conditions. According to the findings above, this paper suggests, in addition to boosting consumption through reducing carbon emissions, schemes that matches offline consumption demands and supplies in space should also be considered.

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