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The Economic Value of Online User Reviews with Ad Spending on Movie Box-Office Sales

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  • Young-Jin Lee

    (University of Denver)

  • Kellie B. Keeling

    (University of Denver)

  • Andrew Urbaczewski

    (University of Denver)

Abstract

Our objective in this paper is to assess the values of online user reviews for movies compared with the sales impact of post-release ad spending for movies. We use weekly box-office sales and ad spending data for 304 movies released in the U.S. along with online ratings and user characteristics from a social network site for movies. By exploiting the fixed-effects two-stage instrumental variable approach to account for movie heterogeneity and simultaneous relationships among user reviews, ad spending and sales, we found that improving the volume and valence of ratings can have the equivalent effect that ad spending can provide.

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  • Young-Jin Lee & Kellie B. Keeling & Andrew Urbaczewski, 2019. "The Economic Value of Online User Reviews with Ad Spending on Movie Box-Office Sales," Information Systems Frontiers, Springer, vol. 21(4), pages 829-844, August.
    • Handle: RePEc:spr:infosf:v:21:y:2019:i:4:d:10.1007_s10796-017-9778-7
    DOI: 10.1007/s10796-017-9778-7
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    Cited by:

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    2. A. Geethapriya & S. Valli, 2021. "An Enhanced Approach to Map Domain-Specific Words in Cross-Domain Sentiment Analysis," Information Systems Frontiers, Springer, vol. 23(3), pages 791-805, June.
    3. Yeo, Sook Fern & Tan, Cheng Ling & Kumar, Ajay & Tan, Kim Hua & Wong, Jee Kit, 2022. "Investigating the impact of AI-powered technologies on Instagrammers’ purchase decisions in digitalization era–A study of the fashion and apparel industry," Technological Forecasting and Social Change, Elsevier, vol. 177(C).
    4. Navid Aghakhani & Onook Oh & Dawn G. Gregg & Jahangir Karimi, 0. "Online Review Consistency Matters: An Elaboration Likelihood Model Perspective," Information Systems Frontiers, Springer, vol. 0, pages 1-15.
    5. Jordi McKenzie, 2023. "The economics of movies (revisited): A survey of recent literature," Journal of Economic Surveys, Wiley Blackwell, vol. 37(2), pages 480-525, April.

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