Question

5. The receipts and release of the four movies with the largest nominal box office revenues, along with the CPI data of each year are presented below. Assuming that the receipts for each of the movies were derived during the year of release, convert the receipts for each to real dollars for the year 2003 (2003 CPI = 184.0). Which movie had the largest real box office receipts? Movie Year of Release Titanic Star Wars Star Wars: Phantom Menace E.T. Box Office Receipts (in millions) 600.8 461.0 431.1 1997 1977 1999 CPI in Year Released 160.5 60.6 166.6 399.9 1982 96.5

Answer 1

Movie	Box office receipts, NR (in millions)	Year of Release	CPI in year released	CPI in year 2003	Real Dollar Receipts in 2003 dollar terms (million dollars)
					=NR*(CPI in 2003/CPI in release year)
Titanic	600.8	1997	160.5	184	688.77
Star Wars	461	1977	60.6	184	1399.74
Star Wars, Phantom Menace	431.1	1999	166.6	184	476.12
E.T.	399.9	1982	96.5	184	762.50

Real Dollar Receipts in 2003 dollar terms for Titanic=600.8*(184/160.5)=$688.77 million

Real Dollar Receipts in 2003 dollar terms for Star Wars=461.0*(184/60.6)=$1399.74 million

Real Dollar Receipts in 2003 dollar terms for Star Wars (Phantom Menace/)

= 431.1*(184/166.6)=$476.12 million

Real Dollar Receipts in 2003 dollar terms for E.T.=399.9*(184/96.5)=$762.50 million

We can see that receipts (in real 2003 dollars) are largest for Star Wars (1977)