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David Ndirangu Ng'ang'a DEMAND FOR LOCALLY PRODUCED FILMS BY RESIDENTS OF NAIROBI COUNTY, KENYA DAVID NDIRANGU NG’ANG’A A RESEARCH PROJECT SUBMITTED TO THE DEPARTMENT OF ECONOMIC THEORY IN THE SCHOOL OF ECONOMICS IN PARTIAL FULFILMENT OF THE REQUIREMENTS FOR THE AWARD OF THE DEGREE OF MASTER OF ECONOMICS (POLICY AND MANAGEMENT) OF KENYATTA UNIVERSITY DECEMBER, 2015 DECLARATION This research project is my original work and has not been presented for a degree in any University or for any other award. Signature: _____________________ Date __________________ DAVID NDIRANGU NG’ANG’A (Bachelor of Economics and Statistics) Reg No: K102/26337/2013 We confirm that the work reported in this project was carried out by the candidate under our supervision Signature: _______________________ Date ____________________ Mwangi Paul Gachanja (PhD) Department of Economic Theory Kenyatta University Signature: ________________________ Date_____________________ Perez Ayieko Onono (PhD) Department of Applied Economics Kenyatta University ii DEDICATION To my parents Peter and Margaret Ng’ang’a, my brothers Christopher, Stephen and Boniface. iii ACKNOWLEDGEMENTS First I thank the Almighty God for giving me strength, knowledge and ability through Jesus Christ our Lord. I thank all the lecturers from the School of Economics for taking me through my studies this far. I am specifically grateful to my supervisors Dr. Perez Onono and Dr. Paul M. Gachanja for their commitment and immense guidance in doing this project. I also thank Dr. Maingi for his contributions. The assistance of Decosta, Angela, Nelly, Elizabeth, Urbanus and all the staff from the school of Economics is also greatly appreciated. I am greatly indebted to the Kenyatta University Management for giving me a scholarship to pursue this Masters course. I appreciate the work of Kenya Film Commission and Kenya National Bureau of Statistics which has been of great assistance in shaping this project. Special appreciation is given to my mother Margaret Ng’ang’a, my father Peter Ng’ang’a, my brothers Christopher Mwangi, Stephen Kamau and Boniface Kamau for their support and encouragement throughout my studies. Finally, I thank all my classmates for their companionship and the teamwork we enjoyed throughout our studies. iv TABLE OF CONTENTS DECLARATION ..................................................................................................... ii DEDICATION ....................................................................................................... iii ACKNOWLEDGEMENTS ................................................................................... iv TABLE OF CONTENTS ........................................................................................ v LIST OF TABLES ............................................................................................... viii LIST OF FIGURES ................................................................................................ ix ABBREVIATIONS AND ACRONYMS ................................................................ x OPERATIONAL DEFINITION OF TERMS ........................................................ xi ABSTRACT ......................................................................................................... xiii CHAPTER ONE ...................................................................................................... 1 INTRODUCTION ................................................................................................... 1 1.1 Background .................................................................................................... 1 1.1.1 Kenyan Film Industry ............................................................................. 1 1.1.2 Film Consumption in Kenya ................................................................... 4 1.1.3 Film as an Experience and Hedonic Good. ............................................. 9 1.2 Statement of the Problem ............................................................................. 13 1.3 Research Questions ...................................................................................... 15 1.4 Objectives of the Study ................................................................................ 15 1.5 Significance of the Study ............................................................................. 16 1.6 Scope of the Study ....................................................................................... 16 1.7 Organization of the study ............................................................................. 16 CHAPTER TWO ................................................................................................... 17 LITERATURE REVIEW ...................................................................................... 17 2.1 Introduction .................................................................................................. 17 2.2 Theoretical literature .................................................................................... 17 2.2.1 Consumer behavior theory ........................................................................ 17 2.2.2 The Theory of Buyer Behaviour ........................................................... 19 2.2.3 The Rational Addiction Theory ............................................................ 21 v 2.2.4 Learning by consuming Theory ............................................................ 23 2.3 Empirical Literature ..................................................................................... 25 2.4 Overview of literature .................................................................................. 33 CHAPTER THREE ............................................................................................... 36 METHODOLOGY ................................................................................................ 36 3.2 Introduction .................................................................................................. 36 3.2 Research design ........................................................................................... 36 3.3 Conceptual framework ................................................................................. 36 3.4 Empirical model ........................................................................................... 40 3.5 Description and measurement of variables .................................................. 41 3.6 Study area .................................................................................................... 42 3.7 Sampling technique and size ........................................................................ 43 3.8 Data type and source .................................................................................... 44 3.9 Data collection ............................................................................................. 45 3.10 Data cleaning, coding and refinement ....................................................... 45 3.11 Data analysis .............................................................................................. 45 CHAPTER FOUR ................................................................................................. 47 4.1 Introduction .................................................................................................. 47 4.2 Descriptive Analysis of the Data ................................................................. 47 4.2.1 Response Rate ....................................................................................... 47 4.2.2 Sex of the Respondents ......................................................................... 48 4.2.3 Age of Respondents .............................................................................. 48 4.2.4 Level of Education of Respondents ...................................................... 49 4.2.5 Income of Respondents ......................................................................... 50 4.2.6 Film Preference among the Respondents between Local Films and Foreign Films ............................................................................................................... 51 4.2.7 Analysis of Collinearity between Explanatory Variables ..................... 52 4.3 Empirical results .......................................................................................... 53 4.3.1 Consumption behavior of residents of Nairobi County on locally produced films ................................................................................................................ 54 4.3.1.1 Preference for Locally Produced Films across Sex ........................ 54 vi 4.3.1.2 Local Film preference by age ......................................................... 55 4.3.1.3 Local Film preference by Level of Education ................................ 57 4.3.1.4 Local Film preference by Income Level ........................................ 58 4.3.1.5 Watching frequency of Locally Produced Films ............................ 60 4.3.1.6 Place of watching ........................................................................... 61 4.3.1.7 Source of Information about Locally Produced Films ................... 63 4.3.1.8 Influence of Actors’ Characteristics on Consumer’s Film Preference .................................................................................................................... 65 4.3.1.9 Influence of Reviews on Consumer’s film preference ................... 69 4.3.1.10 Genre preference .........................................................................
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