Measuring Word of Mouth's Impact on Theatrical Movie Admissions

34 Pages Posted: 5 Nov 2007

See all articles by Charles C. Moul

Charles C. Moul

Miami University of Ohio - Department of Economics

Abstract

Information transmission among consumers (i.e., word of mouth) has received little empirical examination. I offer a technique that can identify and measure the impact of word of mouth, and apply it to data from U.S. theatrical movie admissions. While variables and movie fixed effects comprise the bulk of observed variation, the variance attributable to word of mouth is statistically significant. Results indicate approximately 10% of the variation in consumer expectations of movies can be directly or indirectly attributed to information transmission. Information appears to affect consumer behavior quickly, with the length of a movie's run mattering more than the number of prior admissions.

Suggested Citation

Moul, Charles C., Measuring Word of Mouth's Impact on Theatrical Movie Admissions. Journal of Economics & Management Strategy, Vol. 16, Issue 4, pp. 859-892, Winter 2007, Available at SSRN: https://ssrn.com/abstract=1027079 or http://dx.doi.org/10.1111/j.1530-9134.2007.00160.x

Charles C. Moul (Contact Author)

Miami University of Ohio - Department of Economics ( email )

Farmer School of Business
Oxford, OH 45056
United States

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