The power of the pen : a causal analysis of critics' reviews on market performance

Abstract

Critics’ reviews play a pivotal role in shaping consumer purchasing decisions and influencing market performance, yet their precise causal impact and underlying mechanisms remains not well understood. Leveraging a unique dataset from a leading Amazon seller, this study investigates the causal effects of critics' review articles on product sales and consumer welfare. We integrate daily sales for over 1,000 products with 1,057 critic's review articles from top U.S. media outlets. Employing a multi-faceted methodological approach, including synthetic control and difference-in-differences, we find that critics' review articles generate a substantial and immediate sales uplift, with a 149.2% increase in page visits and a 140.8% increase in sales on the day of release. However, this effect is short-lived, diminishing within four days. Notably, the conversion rate declines by 6.35%, suggesting sales increases are driven by expanded audience reach rather than enhanced purchase propensity. Our analysis reveals significant heterogeneity: reviews are more effective for higher-priced and newly launched, lesser-known products, showing varying impact based on audience demographics and engagement. Through natural language processing, we identify product-oriented topics, cognitive fluency, and affective language as key drivers of review effectiveness. Crucially, critic coverage positively shapes post-purchase consumer sentiment, suggesting a beneficial role for consumers. This research quantifies the causal and dynamic impact of critics' reviews, disentangles their behavioral and linguistic mechanisms, and provides insights into their consumer welfare implications, offering actionable guidance for both firms and media outlets.