Does Showing Smoking in a Movie Cause it to Make Less Money?

by robekulick

A recent study discussed in Scientific American suggests that over the last decade movies that depict smoking make less money than movies without smoking:

http://www.scientificamerican.com/article.cfm?id=smoking-drag-movie-profits&WT.mc_id=SA_syn_HuffPo

The article explains:

“Movies with bigger budgets tended to earn more at the box-office, as they were more likely to feature big stars and massive promotional marketing. Moreover, PG-13 films had a better chance of making more money than R-rated films—in part because the former are accessible to a wider age-range of moviegoers. But even after controlling for factors such as total budget and film rating, the researchers found that smoking was associated with 13 percent less money made in ticket sales.”

The authors of the study are anti-smoking advocates, who suggest that the effect is causal:

“Putting smoking in the film isn’t leading to more popular films that make more money,” Glantz says. It’s leading to less popular films that make less money.” As to why films with smoking make fewer dollars, Glantz says he is uncertain, but he adds it might be part of a collection of edgy behaviors in a film that do not appeal to audiences as much as movie studios expect.”

So is Glantz correct that putting smoking in movies is simply bad business? Not necessarily and actually his very own results show why his statements don’t add up. Glantz finds that PG-13 movies make more money that rated R movies as well. Of course this result isn’t very hard to explain, the potential audience for a rated R movie is smaller. Yet it is clearly still profitable for studios to make rated R movies. Simple economic logic suggests that characteristics that make a movie edgy, such as sex or violence in an R rated movie allow a movie to compete in a different market than the market for non-edgy movies and this allows the studio to spend less on other measures (special effects, etc.) that competition in the non-edgy sector generally requires.

Although I haven’t been able to get access to the study itself, one problem with the empirical implementation seems to be that instead of assessing profits in the dependent variable, the authors chose to include budget as an independent variable in their regression analysis. The problem with this, based on the theory I suggested above, is that smoking may interact with budget and even with rating and other variables in ways that the Glantz study would not pick up.

So despite the fact this anti-smoking advocate seems to think he has more insight into the movie business than movie studios, given the lack of a good theoretical basis for his analysis and the flawed empirical implementation, I think it’s much more likely that the movie studios know what they’re doing.

It seems like we’re now entering a stage in the smoking debate where anti-smoking zealots don’t just purport to know what’s best for you, they purport to know what’s best for business too.

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