Measuring Seat Value in Stadiums and Theaters

• Published in: Production and operations management 2012-01, Vol.21 (1), p.49-68
• Main Authors: Veeraraghavan, Senthil, Vaidyanathan, Ramnath
• Format: Article
• Language: English
• Subjects: Comparative analysis; Consumers; customer behavior; Customer satisfaction; Customer services; Datasets; empirical research; Operations management; ordinal logit models; Professional baseball; Revenue management; revenue management applications; seat value; Stadiums; Studies; Theater; Theaters & cinemas
• ISSN: 1059-1478; 1937-5956
• DOI: 10.1111/j.1937-5956.2011.01249.x

We study how the seat value perceived by consumers attending an event in a theater/stadium depends on the location of their seat relative to the stage/field. We develop a measure of seat value, called the Seat Value Index, and relate it to seat location and consumer characteristics. We implement our analysis on a proprietary data set that a professional baseball franchise in Japan collected from its customers, and provide recommendations. For instance, we find that customers seated in symmetric seats on left and right fields might derive very different valuations from the seats. We also find that the more frequent visitors to the stadium report extreme seat value less often when compared with first‐time visitors. Our findings and insights remain robust to the effects of price and game‐related factors. Thus, our research quantifies the significant influence of seat location on the ex‐post seat value perceived by customers. Utilizing the heterogeneity in seat values at different seat locations, we provide segment‐specific pricing recommendations based on a service‐level objective that would limit the fraction of customers experiencing low seat value to a desired threshold.