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ProPublica’s new “50 states” commitment builds on a decade-plus of local news partnerships
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March 19, 2012, 9:39 a.m.
LINK: papers.nber.org  ➚   |   Posted by: Joshua Benton   |   March 19, 2012

That’s the finding of a new study (pdf) by Craig L. Garthwaite at Northwestern’s Kellogg School of Management. An Oprah endorsement certainly helped the author of the book in question, but it didn’t increase total book sales.

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.

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