Pop Economics

If you’ve ever complained about the high price of movie-theater popcorn, Richard B. McKenzie thinks you should stop whining already (The Wall Street Journal 5/28/10). Richard is author of a book called "Why Popcorn Costs So Much at the Movies, And Other Pricing Puzzles." And while it’s true that a tub of movie-theater popcorn costs more than ten times as much as home-made popcorn, Richard suggests that a little perspective is in order.

For starters, he notes that the real cost of popcorn is "in the time spent popping and cleaning up, and then smuggling the result into a movie theater. (The fact that BYOP is rather easy to get away with, but very few people even try, is an indication that movie popcorn is not as overpriced as the grousers say)." If you think your time is worth $20 an hour, and it takes a half hour to pop it yourself, that would bring the cost to $10.55 — with the 55 cents for kernels and oil.

That’s more than the $8 a large tub costs in Southern California movie theaters — and you’ll also be sacrificing the experience of movie-theater popcorn. Now, you could buy pre-popped popcorn at Costco for less, but Richard thinks this is nowhere near as satisfying an experience. Then there’s the reality that when you buy popcorn at the theater, you’re really paying for its "sound systems, restrooms and lobby glitz." The bottom, line, says Richard, is that theaters could lower the price of their popcorn, but they’d have to compensate with higher ticket prices.