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Movie stars and box office revenues: an empirical analysis

Abstract

This paper examines the relationship between star power and box office revenues using box office data from nine countries and a continuous measure of star power based on the number of visits to a star’s web page on IMDB, the most popular web site for movie-related information. The degree of star power is computed for the top star, top three stars, and the director for the films in our sample. The results indicate that replacing an average star with a top star would increase revenues by an average of $16,618,570, while replacing three average stars with three top stars would increase revenues by an average of $64,410,381.

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Notes

  1. 1.

    Prag and Casavant (1994, p. 220) is an exception. They “use their knowledge of films and movie stars” to construct a list of actors/actresses with star power. In addition to a dummy variable indicating the presence of at least one established star, they employ an alternative variable that equals 0 in the absence of a star, .5 for a rising or falling star, 1 for a single established star, and 2 for more than one established star.

  2. 2.

    Cieply (2010) documents the growing role on ensemble casts in recent films.

  3. 3.

    Schuker (2010) discusses the growing importance of foreign box office revenues in determining casting decisions, what types of films are made, etc.

  4. 4.

    These data were no longer available on Variety.com after 2005.

  5. 5.

    Variey reports the box office revenues in terms of U.S. Dollars; all box office receipts were converted to constant dollars using the U.S. Consumer Price Index.

  6. 6.

    Film budgets are reported in U.S. dollars; we convert into constant dollars by dividing by the U.S. Consumer price Index.

  7. 7.

    Eliashberg and Shugan (1997) provide a summary of the role of critics in the motion picture industry and find that critics have their greatest impact on box office reviews several weeks after the film has been released.

  8. 8.

    For example, see The Economist (2000).

  9. 9.

    Orlando Bloom’s score is for the period 2002–2005. Prior to appearing in The Lord of the Rings and Black Hawk Down in December of 2001, his average STARmeter rankings for 45,719, 1,535, and 1,176 for 1999, 2000, and 2001, respectively.

  10. 10.

    Income is measured as GDP PPP (Purchasing Power Parity) dollars (in 1,000s) per capita, and then converted to real terms using the U.S. CPI. The population variable is also normalized to a value of 100 in the first year.

  11. 11.

    Although the model employs a panel data set it is not possible to include a time trend with the INCOME and POPULATION variables because of perfect multicollinearity.

  12. 12.

    The model was estimated using the suest routine in Stata, release 11. The standard errors were derived using the Huber/White/sandwich approach that adjusts for within-cluster correlation. See Rogers (1993) for a discussion of the estimation of the standard errors.

  13. 13.

    See Holson (2005) for a discussion of the impact of DVDs and DVRs on movie attendance.

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Acknowledgments

We are indebted to an anonymous referee and Andreas Waldkirch for very helpful comments that substantially improved the paper and to the Douglas Chair Fund for financial assistance.

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Correspondence to Randy A. Nelson.

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Nelson, R.A., Glotfelty, R. Movie stars and box office revenues: an empirical analysis. J Cult Econ 36, 141–166 (2012). https://doi.org/10.1007/s10824-012-9159-5

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Keywords

  • Motion picture industry
  • Box office revenue
  • Movie stars

JEL classification

  • L82
  • Z11