Experts’ awards and economic success: evidence from an Italian literary prize

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu Product quality is often unobservable ex-ante and consumers rely on experts' judgments, sometimes in the form of ratings or awards. Do awards affect consumers' choices or, conversely, are they conferred on the most popular products? To disentangle this issue, we use data about the most important Italian Literary Prize, the "Strega Prize", undertaking two different estimation strategies to evaluate the impact that winning the Prize has on book sales. First, we adopt a Regression Discontinuity Design using a measure of book sales as a dependent variable and as a forcing variable (proxying for intrinsic book quality) the jury votes received by each nominated book in the competition. We find that the Strega Prize has a very strong impact on sales. Second, by using weekly data on appearances on bestseller lists, we estimate a difference-in-differences model in which we compare sales performance of treated and control books before the award is conferred with their respective performances afterwards. The results confirm a huge influence of the Prize on book sales and show that most of the impact occurs in the weeks following the announcement of the Prize. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SJEL Classification: Z10, Z11, L15, L80, M30, D12, J44

Effects of journalism awards as quality signals on demand

“…The analysis indicates that winning the Grimme Prize is expected to have a slightly positive effect on the audience reach of a journalistic broadcast compared to that of winless nominees when considering the overall population. These findings mainly confirm the results of existent literature, which tend to discern a positive effect of media awards on product sales (Logan and Sutter, 2004;Nelson et al, 2001;Ponzo and Scoppa, 2015).…”

“…Also, the authors cannot explicitly differentiate between the effect of the inherent product quality and the effect of the quality signal on circulation. Ponzo and Scoppa (2015) offer an approach to address the endogeneity problem by examining the impact of winning the Italian Strega Prize on book sales based on a DD approach. They compare the sales development of the award winning books to the sales development of the nominated titles.…”

Towards an Economics of Awards

“…The only aspects of value about awards may be considered to be the ancillary income. It has been empirically shown, for instance, that recipients financially profit from having been awarded a major book prize (Chan et al ., ; Ponzo and Scoppa, ). Awards can also improve the health of their recipients.…”

What Do Book Awards Signal? An Analysis of Book Awards in Three Countries

“…We have studied both types of consensus for the book industry, although passive consumption somewhat limitedly. A number of studies have tried to relate awards to sales, which is beyond our scope here (Ashworth, Heyndels, & Werck, 2010; Clement, Proppe, & Rott, 2007; Ponzo & Scoppa, 2015). We have only looked at the overlap between bestseller lists and award winners.…”

“…They are studied as signifiers of cultural value (English, 2005;Schmutz, 2005), and as signals of quality in a market dominated by quality uncertainty (Ackerberg, 2003;Gemser, Leenders, & Wijnberg, 2008;Ginsburgh, 2003;Peltoniemi, 2015). A number of studies have analyzed the effect that awards have on the success of products in markets, especially in the film market (Nelson, Donihue, Waldman, & Wheaton, 2001;Ponzo & Scoppa, 2015;Zhuang, Babin, Xiao, & Paun, 2013). And there is a gradual development of the role of awards in a broader economics of attention (Dekker & Popik, 2014;English, 2005;Frey & Gallus, 2015;Ginsburgh & Weyers, 2014;Muniesa & Helgesson, 2013).…”