Preference for Cultural Goods: Demand and Welfare in the Korea Films Market

Abstract

There is an ongoing debate on whether cultural goods like movies and music albums should be protected from foreign competitors. An implicit assumption under the argument for protection is that consumers easily substitute cultural elements for other product characteristics. In this paper we estimate consumers' willingness to pay for cultural elements using admission data on films in Korea. Our results show that Korean consumers are willing to pay more for home-produced movies compared to imported foreign movies and that cultural preference is one of the key determinants of welfare changes in various trade policy settings.