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Do expert reviews really drive demand? Evidence from a German car magazine

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  • Dewenter, Ralf
  • Heimeshoff, Ulrich

Abstract

A wide range of media provide information on many products based on reviews or expert opinions. A natural question is, whether these reviews and expert opinions have any effect on sales. A small but growing literature in economics and marketing science deals with this issue, by testing the relevance of such product information for goods such as financial instruments, wine, books and movies. However, most of these products 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. 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

  • Dewenter, Ralf & Heimeshoff, Ulrich, 2014. "Do expert reviews really drive demand? Evidence from a German car magazine," DICE Discussion Papers 151, University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
  • Handle: RePEc:zbw:dicedp:151
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    References listed on IDEAS

    as
    1. Hilger, James & Rafert, Greg & Villas-Boas, Sofia Berto, 2007. "Expert Opinion and the Demand for Experience Goods: An Experimental Approach," CUDARE Working Papers 6055, University of California, Berkeley, Department of Agricultural and Resource Economics.
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    13. repec:hrv:faseco:33078973 is not listed on IDEAS
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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. 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.
    3. repec:hrv:faseco:33078973 is not listed on IDEAS

    More about this item

    Keywords

    Car magazines; Test Scores; Demand;

    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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