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Do Expert Reviewers Really Drive Demand? Evidence from a German Car Magazine

Author

Listed:
  • Ralf Dewenter

    (Helmut Schmidt University, Hamburg)

  • Ulrich Heimeshoff

    (DICE / Heinrich-Heine-Universität Düsseldorf)

Abstract

There is a wide range of magazines, newspapers, TV shows, and websites providing information on products based on product reviews or expert opinions. A natural question is, whether these reviews and expert opinions have effects on product sales. There is a small but growing literature in economics and marketing science testing the relevance of such product information, based on products such as financial instruments, wine, books and movies. However, books, movies, and wine have in common that quality is very difficult to measure. It is always also a matter of taste whether these products can be seen as high or low quality goods. Even financial products are sometimes hard to evaluate due to the well-known fact, that financial market data often contains much noise. Based on a unique dataset, we test whether test scores published in a major German car magazine have significant impact on registrations of new cars in Germany. We find that test scores for certain cars have statistically significant impact on the number of new cars sold by several leading manufacturers on the German car market.

Suggested Citation

  • Ralf Dewenter & Ulrich Heimeshoff, 2014. "Do Expert Reviewers Really Drive Demand? Evidence from a German Car Magazine," Working Paper 140/2014, Helmut Schmidt University, Hamburg.
    • Handle: RePEc:ris:vhsuwp:2014_140
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    Cited by:

    1. Dewenter, Ralf & Heimeshoff, Ulrich, 2015. "More ads more revs: A note on media bias in review likelihood," Economic Modelling, Elsevier, vol. 44(C), pages 156-161.
    2. Daniel Kaimann, 2020. "Behind the Review Curtain: Decomposition of Online Consumer Ratings in Peer-to-Peer Markets," Sustainability, MDPI, vol. 12(15), pages 1-17, July.
    3. Tom Hamami & James Bailey, 2021. "Expert product reviews and conflict of interest," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 42(1), pages 170-176, January.
    4. Mandys, Filip & Taneja, Shivani, 2024. "Demand for green and fossil fuel automobiles," Transportation Research Part A: Policy and Practice, Elsevier, vol. 190(C).
    5. Tom Hamami, 2019. "Network Effects, Bargaining Power, and Product Review Bias: Theory and Evidence," Journal of Industrial Economics, Wiley Blackwell, vol. 67(2), pages 372-407, June.
    6. Dieter Pennerstorfer & Christoph Weiss & Andreas Huber, 2019. "Experts, Reputation and Umbrella Effects: Empirical Evidence from Wine Prices," Economics working papers 2019-08, Department of Economics, Johannes Kepler University Linz, Austria.
    7. Sendhil Mullainathan & Andrei Shleifer, 2005. "The Market for News," American Economic Review, American Economic Association, vol. 95(4), pages 1031-1053, September.

    More about this item

    Keywords

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    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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