The Impact of Ratings on the Book Demand

The paper examines the impact of different metrics of ratings (fractions of positive and negative ratings, number of people who rate a book, and standard deviation of rating) on the demand for books. We build 5 logarithmic models describing the correlation between the demand for books and these alternative metrics. Model estimation was based on the data on ratings from LiveLib.ru and the data on sales of one North-Western Federal District book retail chain in 2015. According to the estimation results, number of people who rate a book has a positive statistically significant impact on the demand for books. The fraction of 5-stars increases sales and the fraction of 2-stars decreases sales in a statistically significant way. Moreover, if a book has 2-stars rating, the fraction of 5-stars ratings has a less impact on the demand. The results might aid practitioners in making decisions and have some potentially important consequences for bookstores.