The Influence of Expert Reviews on Consumer Demand for Experience Goods: A Case Study of Movie Critics

25 Pages Posted: 22 Mar 2005

See all articles by David A. Reinstein

David A. Reinstein

University of California, Berkeley - Department of Economics

Christopher M. Snyder

Dartmouth College - Department of Economics

Abstract

An inherent problem in measuring the influence of expert reviews on the demand for experience goods is that a correlation between good reviews and high demand may be spurious, induced by an underlying correlation with unobservable quality signals. Using the timing of the reviews by two popular movie critics, Siskel and Ebert, relative to opening weekend box office revenue, we apply a difference-in-differences approach to circumvent the problem of spurious correlation. After purging the spurious correlation, the measured influence effect is smaller though still detectable. Positive reviews have a particularly large influence on the demand for dramas and narrowly-released movies.

Suggested Citation

Reinstein, David A. and Snyder, Christopher M., The Influence of Expert Reviews on Consumer Demand for Experience Goods: A Case Study of Movie Critics. Journal of Industrial Economics, Vol. 53, No. 1, pp. 27-51, March 2005. Available at SSRN: https://ssrn.com/abstract=685169

David A. Reinstein (Contact Author)

University of California, Berkeley - Department of Economics ( email )

549 Evans Hall #3880
Berkeley, CA 94720-3880
United States
510 642-0822 (Phone)

Christopher M. Snyder

Dartmouth College - Department of Economics ( email )

301 Rockefeller Hall
Hanover, NH 03755
United States
(603) 646-0642 (Phone)
(603) 646-2122 (Fax)

HOME PAGE: http://www.dartmouth.edu/~csnyder/

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