You Get a Book! Demand Spillovers, Combative Advertising, and Celebrity Endorsements
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.
I am grateful to Jen Brown, Meghan Busse, Kerwin Charles, Joseph Doyle, Bill Evans, Melissa Kearney, Matt Notowidigdo, Alan Sorensen, and Heidi Williams for valuable comments and advice. Lena Fishman provided excellent research assistance. I would like to thank Jonathan Stolper at BookScan for providing access to the book sales data. All errors remain my own. The views expressed herein are those of the author and do not necessarily reflect the views of the National Bureau of Economic Research.