Abstract

http://ssrn.com/abstract=616262
 
 

References (37)



 
 

Citations (30)



 


 



Do Online Reviews Matter? - an Empirical Investigation of Panel Data


Wenjing Duan


George Washington University - School of Business

Bin Gu


Arizona State University (ASU) - Department of Information Systems

Andrew B. Whinston


University of Texas at Austin - Department of Information, Risk and Operations Management

Janurary 2005

Decision Support Systems, Vol. 45, No. 4, pp. 1007-1016, November 2008

Abstract:     
This study examines the persuasive effect and awareness effect of online user reviews on movies' daily box office performance. In contrast to earlier studies that take online user reviews as an exogenous factor, we consider reviews both influencing and influenced by movie sales. The consideration of the endogenous nature of online user reviews significantly changes the analysis. Our result shows that the rating of online user reviews has no significant impact on movies' box office revenues after accounting for the endogeneity, indicating that online user reviews have little persuasive effect on consumer purchase decisions. Nevertheless, we find that box office sales are significantly influenced by the volume of online posting, suggesting the importance of awareness effect. The finding of awareness effect for online user reviews is surprising as online reviews under the analysis are posted to the same website and are not expected to increase product awareness. We attribute the effect to online user reviews as an indicator of the intensity of underlying word-of-mouth that plays a dominant role in driving box office revenues.

Number of Pages in PDF File: 33

Keywords: Online User Review, Word-of-Mouth, Product Sale, Motion Picture

JEL Classification: L82, M31

Accepted Paper Series


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Date posted: November 9, 2004 ; Last revised: August 2, 2014

Suggested Citation

Duan, Wenjing and Gu, Bin and Whinston, Andrew B., Do Online Reviews Matter? - an Empirical Investigation of Panel Data (Janurary 2005). Decision Support Systems, Vol. 45, No. 4, pp. 1007-1016, November 2008. Available at SSRN: http://ssrn.com/abstract=616262

Contact Information

Wenjing Duan (Contact Author)
George Washington University - School of Business ( email )
2121 I Street NW
Washington, DC 20052
United States
Bin Gu
Arizona State University (ASU) - Department of Information Systems ( email )
Tempe, AZ
United States
Andrew B. Whinston
University of Texas at Austin - Department of Information, Risk and Operations Management ( email )
CBA 5.202
Austin, TX 78712
United States
512-471-8879 (Phone)
Feedback to SSRN


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