Working Paper: NBER ID: w17915
Authors: Craig L. Garthwaite
Abstract: This paper studies the economic effects of endorsements. In the publishing sector, endorsements from the Oprah Winfrey Book Club are found to be a business stealing form of advertising that raises title level sales without increasing the market size. The endorsements decrease aggregate adult fiction sales; likely as a result of the endorsed books being more difficult than those that otherwise would have been purchased. Economically meaningful sales increases are also found for non-endorsed titles by endorsed authors. These spillover demand estimates demonstrate a broad range of benefits from advertising for firms operating in a multiproduct brand setting.
Keywords: Celebrity Endorsements; Book Sales; Advertising; Spillover Demand
JEL Codes: D20; D22; I20; L10; L20
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Endorsements from the Oprah Winfrey Book Club (Y30) | Increase in sales for endorsed titles (Z23) |
| Increase in sales for endorsed titles (Z23) | Sales decline for aggregate adult fiction (Y92) |
| Endorsements from the Oprah Winfrey Book Club (Y30) | Spillover benefits for non-endorsed titles (Z29) |
| Endorsed titles are harder or longer (Y80) | Business stealing from other titles (A19) |