The Effect of Individual Professional Critics on Books’ Sales: Capturing Selection Biases from Observable and Unobservable Factors

Marco Caliendo, Michel Clement, Edlira Shehu

Publikation: Bidrag til tidsskriftTidsskriftartikelForskningpeer review

Abstrakt

We propose a combined approach of propensity score matching with difference-in-differences methods for reducing selection biases of products being reviewed by critics. Critics’ decision to review products may be driven by observable (e.g., star power) and unobservable (e.g., critics’ individual preferences) factors, raising the question of reverse causality and selection biases. Our proposed approach enables to rigorously control for selection biases by observable and unobservable characteristics. We apply our methodological framework on data from the German book market and estimate the sales effect of a well-known TV critic. We identify substantial selection effects of individual critics, which result in serious underestimation of the short-term effect (up to 29 %) and the long-term effect (up to 37 %). The results emphasize the relevance of the proposed methodological framework by demonstrating that observable and unobservable factors drive selection effects.
OriginalsprogEngelsk
TidsskriftMarketing Letters
Vol/bind26
Udgave nummer4
Sider (fra-til)423–436
Antal sider14
ISSN0923-0645
DOI
StatusUdgivet - 2015
Udgivet eksterntJa

Emneord

  • Critics
  • Reviewer
  • Propensity score matching
  • Difference-in-difference
  • Selection effects

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