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

Marco Caliendo, Michel Clement, Edlira Shehu

Research output: Contribution to journalJournal article

Abstract

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.
Original languageEnglish
JournalMarketing Letters
Volume26
Issue number4
Pages (from-to)423–436
Number of pages14
ISSN0923-0645
DOIs
Publication statusPublished - 2015
Externally publishedYes

Keywords

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

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