The box office as a leading indicator of investor sentiment

This study hypothesizes that shifts in investor sentiment appear more rapidly in individual behavior, as reflected by box office gross real earnings, than in traditional stock market economic indicators. The results show that box office real gross earnings serve as a leading contrarian indicator of investor sentiment, improving out-of-sample forecast accuracy. Economically, low sentiment reduces discretionary spending, prompting a shift to more affordable leisure activities such as moviegoing. Behaviorally, low sentiment increases the demand for escapism, which films provide. Box office real gross earnings, which reflect a uniform, low-cost, and purely discretionary activity measured daily at the national level, offer a timely and sensitive signal of investor sentiment.