The Effect of Word of Mouth on Sales: Online Book Reviews

The Effect of Word of Mouth on Sales: Online Book Reviews

December 2003 | Judith A. Chevalier, Dina Mayzlin
This paper examines the impact of online book reviews on sales at Amazon.com and Barnes & Noble.com. The authors find that reviews are overwhelmingly positive at both sites, but Amazon has more and longer reviews. An improvement in a book's reviews leads to increased relative sales at that site, and 1-star reviews have a greater impact than 5-star reviews. The results suggest that online customer communication significantly influences consumer behavior. The study uses publicly available data from Amazon and BN.com to analyze the relationship between customer reviews and sales. The authors control for factors such as price and shipping time, and find that the sales ranks of books are influenced by the number and quality of reviews. They also find that the impact of reviews varies between sites, with Amazon reviews having a more significant effect on sales than BN.com reviews. The authors also find that the length of reviews is correlated with the enthusiasm of the reviewer, with longer reviews often indicating more detailed and positive feedback. However, longer reviews do not necessarily lead to increased sales. The study also finds that 1-star reviews have a larger impact on sales than 5-star reviews, suggesting that negative reviews may be more influential in shaping consumer behavior. The authors conclude that online reviews play a significant role in influencing consumer decisions and that the effectiveness of reviews varies depending on the platform and the type of review. The study contributes to the broader literature on the economics of online book sales and the impact of customer reviews on consumer behavior.This paper examines the impact of online book reviews on sales at Amazon.com and Barnes & Noble.com. The authors find that reviews are overwhelmingly positive at both sites, but Amazon has more and longer reviews. An improvement in a book's reviews leads to increased relative sales at that site, and 1-star reviews have a greater impact than 5-star reviews. The results suggest that online customer communication significantly influences consumer behavior. The study uses publicly available data from Amazon and BN.com to analyze the relationship between customer reviews and sales. The authors control for factors such as price and shipping time, and find that the sales ranks of books are influenced by the number and quality of reviews. They also find that the impact of reviews varies between sites, with Amazon reviews having a more significant effect on sales than BN.com reviews. The authors also find that the length of reviews is correlated with the enthusiasm of the reviewer, with longer reviews often indicating more detailed and positive feedback. However, longer reviews do not necessarily lead to increased sales. The study also finds that 1-star reviews have a larger impact on sales than 5-star reviews, suggesting that negative reviews may be more influential in shaping consumer behavior. The authors conclude that online reviews play a significant role in influencing consumer decisions and that the effectiveness of reviews varies depending on the platform and the type of review. The study contributes to the broader literature on the economics of online book sales and the impact of customer reviews on consumer behavior.
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