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Is Rotten Tomatoes killing the movie industry? A regression discontinuity approach

Author

Listed:
  • Marislei Nishijima
  • Mauro Rodrigues
  • Thais Luiza Donega Souza

Abstract

We study the effect of expert reviews on consumer choice, focusing on the movie industry. Specifically, we estimate the impact of a popular movie review aggregator – Rotten Tomatoes (RT) – on box office revenue, using a sample of 1,239 movies widely-released in the U.S. between 1999 and 2019. RT’s rating system allows us to use regression discontinuity, thus avoiding problems associated with omitted unobservable characteristics of movies (such as quality and commercial appeal). We do not find evidence that RT ratings affect box office performance.

Suggested Citation

  • Marislei Nishijima & Mauro Rodrigues & Thais Luiza Donega Souza, 2021. "Is Rotten Tomatoes killing the movie industry? A regression discontinuity approach," Working Papers, Department of Economics 2021_12, University of São Paulo (FEA-USP).
    • Handle: RePEc:spa:wpaper:2021wpecon12
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    References listed on IDEAS

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    1. David A. Reinstein & Christopher M. Snyder, 2005. "The Influence Of Expert Reviews On Consumer Demand For Experience Goods: A Case Study Of Movie Critics," Journal of Industrial Economics, Wiley Blackwell, vol. 53(1), pages 27-51, March.
    2. Suman Basuroy & S. Abraham Ravid & Richard T. Gretz & B. J. Allen, 2020. "Is everybody an expert? An investigation into the impact of professional versus user reviews on movie revenues," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 44(1), pages 57-96, March.
    3. Victor Ginsburgh, 2003. "Awards, Success and Aesthetic Quality in the Arts," Journal of Economic Perspectives, American Economic Association, vol. 17(2), pages 99-111, Spring.
    4. Christer Thrane, 2018. "Do expert reviews affect the decision to see motion pictures in movie theatres? An experimental approach," Applied Economics, Taylor & Francis Journals, vol. 50(28), pages 3066-3075, June.
    5. Alexander L. Brown & Colin F. Camerer & Dan Lovallo, 2012. "To Review or Not to Review? Limited Strategic Thinking at the Movie Box Office," American Economic Journal: Microeconomics, American Economic Association, vol. 4(2), pages 1-26, May.
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    More about this item

    Keywords

    Expert reviews; Rotten Tomatoes; Movie industry; Films; Regression discontinuity;
    All these keywords.

    JEL classification:

    • D8 - Microeconomics - - Information, Knowledge, and Uncertainty
    • D9 - Microeconomics - - Micro-Based Behavioral Economics
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • C39 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Other

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