Digitization and Pre-Purchase Information: The Causal and Welfare Impacts of Reviews and Crowd Ratings

• 成果类型: Article
• 署名作者: Reimers, Imke; Waldfogel, Joel
• 署名单位: Northeastern University; University of Minnesota System; University of Minnesota Twin Cities; University of Minnesota System; University of Minnesota Twin Cities; National Bureau of Economic Research; Leibniz Association; Zentrum fur Europaische Wirtschaftsforschung (ZEW)
• 刊物名称: AMERICAN ECONOMIC REVIEW
• ISSN/ISSBN: 0002-8282
• DOI: 10.1257/aer.20200153
• 发表日期: 2021
• 页码: 1944-1971
• 关键词: discrete-choice models; online; sales; books

摘要

Digitization has led to many new creative products, straining the capacity of professional critics and consumers. Yet, the digitization of retailing has also delivered new crowd-based sources of pre-purchase information. We compare the relative impacts of professional critics and crowd-based Amazon star ratings on consumer welfare in book publishing. Using various fixed effects and discontinuity-based empirical strategies, we estimate their causal impacts on sales. We use these causal estimates to calibrate a structural demand model. The aggregate effect of star ratings on consumer surplus is, in our baseline estimates, more than ten times the effect of traditional review outlets.