Reimers, Imke and Waldfogel, Joel <br/><br/>
Digitization and pre-purchase information: The causal and welfare impacts of reviews and crowd ratings 

 - The American Economic Review  
 - 111(6), Jun, 2021: p.1944-1971 
<br/><br/> Digitization has led to many new creative products, straining the capacity of professional critics and consumers. Yet, the digitization of retailing has also delivered new crowd-based sources of pre-purchase information. We compare the relative impacts of professional critics and crowd-based Amazon star ratings on consumer welfare in book publishing. Using various fixed effects and discontinuity-based empirical strategies, we estimate their causal impacts on sales. We use these causal estimates to calibrate a structural demand model. The aggregate effect of star ratings on consumer surplus is, in our baseline estimates, more than ten times the effect of traditional review outlets. – Reproduced