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Tag Archives: movie theaters

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Shot on July 2, 1881, President Garfield lay dying in a room with the first air conditioner.  Naval engineers, whose primary expertise was ventilating mining shafts, had been called in to help the ailing leader. The cooling device they assembled was composed of a large box filled with ice, salt, water, terry cloth and charcoal filters. As the ice melted and saturated the terry cloth, a fan circulated the cooler air that was created. During the remaining days of the President’s life, his cooling unit consumed 250,000 pounds of ice.

With the first rotary fan having been invented in 2nd century China, it took milennia for us to harness the power of cooling to our economic growth.

Willis Carrier called his 1906 cooling device “An Apparatus for Treating Air.” Very large, noisy, and dependent on ammonia, the Carrier unit had changed considerably when, during the 1950s, AC took off. But even one hundred years ago, his innovation was used by a printing plant because it dried ink faster and diminished paper jams. Since then, cooler offices have meant more productive workers–for typists, 24% better (really, a conclusion from one study)  It brought people to the movies on a hot summer day, to air cooled department stores, and to Florida and California. In 1940, a Packard was the first auto with AC.

You see where this is going. Air conditioning helps economic growth by making us more comfortable where we work, as we shop and when we drive. It expands the potential of  our human capital.

Written by financial historian John Steele Gordon, WSJ.com has a wonderful article on the history of air conditioning. Then, placing AC within a broader innovative context in the US, Bill Bryson tells us more about its history in Made in America.

 

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Higher quality film? Better projectors? Online ticketing? No. The “most important technological innovation since sound” was the armrest cup holder (according to a movie theater owner).

Please think about a cup holder. The cup holder makes huge popcorn buckets manageable. With other revenue sources less lucrative, popcorn and other snacks have become the key to profits. Also, through extra salt, popcorn enables theater owners to generate extra soda sales.

That takes us to one other extra. Calories. At 1600 calories, a medium bucket of popcorn has the same number of calories as 3 quarter pounders and a stick of butter. Recent health care regulation will require posting calories in movie theaters. Do you think their popcorn sales will suffer?

A note. Theater owners prefer less gripping movie stories so that people are willing to leave for more popcorn and soda.

The Economic Lesson

Economists like to say that we make decisions at the margin whenever we do more or less of an activity. For movie goers, thinking at the marginal can involve more or less popcorn, soda, and calories.

For movie theater owners, consumers’ snacking purchases become marginal revenue. The profit margin for popcorn has been 90 cents for every dollar sold.

 

 

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