Cinema industry is one of the main elements of cultural development. Development of cinema industry requires the identifying the various social, economic and cultural dimensions. This paper studies the economic characteristics of cinema in Iran. In this regard, it is necessary to identify the determinants of demand for movies and their demand elasticities. The computed elasticities have useful applications in economic policy-making, so that the effective plans regarding cultural and economic viewpoints in the regional and global scopes can be compiled. In this paper, relying on theoretical basics and using empirical studies, the affecting factors on demand for movies have been estimated for 28 provinces of Iran over the 2001-2008; and then demand for watching movies with decomposition of them into Iranian and foreign films has been estimated using ordinary least squares during 1971-2008. The estimation results of panel data model indicate that demand for movie has positive relationship with real per capita income and negative one with real price of cinema ticket. In addition the increased numbers of TV sets, personal computers and VCD and DVD players have the declining effect on the number of cinema attendants. As well, the estimation results using time series data indicate that demand for foreign movies in Iran comparing with demand for Iranian ones is more sensitive to changes in ticket prices and literacy rate.
JEL Classifications: C23, L82, z11