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Do Expert Reviews Affect the Demand for Wine?

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  • Richard Friberg
  • Erik Gr�nqvist

Abstract

We examine the demand for wines in Sweden using five years of weekly data on sales, advertising, and expert reviews. The effect of a favorable review peaks in the week after publication with an increase in demand of 6 percent, and the effect remains significant for more than 20 weeks. We find small demand-enhancing effects of neutral reviews and no evidence of important negative effects from unfavorable reviews. Restrictions on the state-owned monopoly retailer and the exogenous timing of a subset of the reviews support a causal interpretation of the effects of reviews on demand. (JEL D12, L66, L81, M31, M37)

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File URL: http://www.aeaweb.org/articles.php?doi=10.1257/app.4.1.193
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Bibliographic Info

Article provided by American Economic Association in its journal American Economic Journal: Applied Economics.

Volume (Year): 4 (2012)
Issue (Month): 1 (January)
Pages: 193-211

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Handle: RePEc:aea:aejapp:v:4:y:2012:i:1:p:193-211

Note: DOI: 10.1257/app.4.1.193
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  1. Raj Chetty & Adam Looney & Kory Kroft, 2009. "Salience and Taxation: Theory and Evidence," American Economic Review, American Economic Association, vol. 99(4), pages 1145-77, September.
  2. Manski, C.F., 1991. "Identification of Endogenous Social Effects: the Reflection Problem," Working papers 9127, Wisconsin Madison - Social Systems.
  3. David Dranove & Ginger Zhe Jin, 2010. "Quality Disclosure and Certification: Theory and Practice," Journal of Economic Literature, American Economic Association, vol. 48(4), pages 935-63, December.
  4. Hongbin Cai & Yuyu Chen & Hanming Fang, 2009. "Observational Learning: Evidence from a Randomized Natural Field Experiment," American Economic Review, American Economic Association, vol. 99(3), pages 864-82, June.
  5. Shaked, Avner & Sutton, John, 1982. "Relaxing Price Competition through Product Differentiation," Review of Economic Studies, Wiley Blackwell, vol. 49(1), pages 3-13, January.
  6. Duflo, Esther & Saez, Emmanuel, 2002. "Participation and investment decisions in a retirement plan: the influence of colleagues' choices," Journal of Public Economics, Elsevier, vol. 85(1), pages 121-148, July.
  7. Orley Ashenfelter, 2008. "Predicting the Quality and Prices of Bordeaux Wine," Economic Journal, Royal Economic Society, vol. 118(529), pages F174-F184, 06.
  8. Ken Hendricks & Alan Sorensen, 2009. "Information and the Skewness of Music Sales," Journal of Political Economy, University of Chicago Press, vol. 117(2), pages 324-369, 04.
  9. Randall Lewis & Justin M. Rao & David H. Reiley, 2014. "Measuring the Effects of Advertising: The Digital Frontier," NBER Chapters, in: Economics of Digitization National Bureau of Economic Research, Inc.
  10. David A. Reinstein & Christopher M. Snyder, 2005. "THE INFLUENCE OF EXPERT REVIEWS ON CONSUMER DEMAND FOR EXPERIENCE GOODS: A CASE STUDY OF MOVIE CRITICS -super-* ," Journal of Industrial Economics, Wiley Blackwell, vol. 53(1), pages 27-51, 03.
  11. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-54, July/Aug..
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Cited by:
  1. Michela Ponzo & Vincenzo Scoppa, 2013. "Experts’ Awards And Economic Success: Evidence From An Italian Literary Prize," Working Papers 201306, Università della Calabria, Dipartimento di Economia, Statistica e Finanza (Ex Dipartimento di Economia e Statistica).
  2. Vitor Joao Pereira Domingues Martinho, 2012. "Consumers behavior of Portuguese wine," Papers 1301.2169, arXiv.org.

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