Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/107552
Authors: 
Ponzo, Michela
Scoppa, Vincenzo
Year of Publication: 
2015
Series/Report no.: 
IZA Discussion Papers 8765
Abstract: 
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.
Subjects: 
cultural economics
awards
asymmetric information
literary prize
book sales
product quality
regression discontinuity design
difference-in-differences model
JEL: 
Z10
Z11
L15
L80
M30
D12
J44
Document Type: 
Working Paper

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