Self-Regulation vs State Regulation: Evidence from Cinema Age Restrictions

Abstract

This paper studies the effect of self-regulation on the leniency of cinema age restrictions using cross-country variation in the classifications applied to 1922 movies released in 31 countries between 2002 and 2011. Our data show that restrictive classifications reduce box office revenues, particularly for movies with wide box office appeal. These data also show that self-regulated ratings agencies display greater leniency than state-regulated agencies when classifying movies with wide appeal. However, consistent with theoretical models of self-regulation, the degree of leniency is small because it is not costly for governments to intervene and regulate ratings themselves.

Publication
International Journal of Industrial Organization, Volume 75, March 2021, 102708