Statistics in the News: Chapter 18 Model
Building With Multiple Regression
The Value of an Oscar
Every February, members of the Academy of Motion Picture
Arts and Sciences vote to nominate five films for an Academy
Award (an Oscar). Then, six weeks later after a second round
of voting, winners in over 20 major categories are announced
at a nationally televised ceremony. For actors, actresses,
directors, and producers a nomination or award can translate
into a great deal of money. So one may well ask: What is an
Oscar worth?
Recently, four researchers tackled the question by building
two alternative econometric models with the help of
weekly box-office data for 131 nominated and 131 non-nominated
films that were released during the 1978-1987 period. One
equation in each model related SHARE (the percentage of all
screens on which a given film appeared in a given week) to
a number of dummy variables (including film-specific factors
and the quarter of the year in which the film was released),
the number of weeks the film remained in distribution, and
variables measuring the impact of nominations or Academy awards
for best supporting actor/actress, best actor/actress, and
best picture. A second equation in each model related ARPS
(the average revenue per screen) to the same variables.
Table A excerpts some of the results derived from one of
the models. The separate effects on weekly revenues of a best
actor/actress nomination or award appear in the top half
of the table. Corresponding data for a best picture nomination
or award appear in the lower half. The percentages indicate
the release dates of the affected films.
Table A Predicted Weekly Values of an
Oscar Nomination and Award (1997 dollars)
|
Release Date |
Weighted Average |
|
1st Quarter |
2nd Quarter |
3rd Quarter |
4th Quarter |
Best actor/actress |
Nomination |
$561,733
(13%) |
$709,527
(7%) |
$1,190,700
(19%) |
$3,753,359
(61%) |
$2,638,474 |
Award |
$3,435,082
(20%) |
$3,862,363
(0%) |
$5,366,594
(15%) |
$11,548,494
(65%) |
$8,998,527 |
Best Picture |
Nomination |
$1,269,787
(18%) |
$1,605,363
(8%) |
$2,698,171
(20%) |
$8,531,495
(54%) |
$5,503,632 |
Award |
$5,378,222
(0%) |
$6,035,574
(0%) |
$8,360,194
(33%) |
$17,879,921
(67%) |
$14,704,488 |
Thus, 13% of all films with best actor/actress nominations
were released in the 1st quarter of the year and
such a nomination raised weekly revenues for such a film by
$561,733. On the other hand, 61% of all films with best actor/actress
nominations were released in the 4th quarter of
the year and such a nomination raised weekly revenues of such
a film by $3,753,359. And note: In each case, the revenue
figure represents additional revenue compared to the
most successful non-nominated film. Hence the dollar amount
might be viewed as the minimum value of an Oscar. The remaining
entries are similarly interpreted. For example, a 4th
quarter film receiving an Oscar for Best Picture can be expected
to garner an additional $17,879,921 per week.
The authors explain the greater payoff to late-release films
in two ways:
- by the fact that 4th quarter films are apt
to be fresh in the minds of voting members of the Academy
and, therefore, have a greater chance of being nominated
and of later receiving an Oscar than, say, 1st
quarter films,
- by the fact that 4th quarter films have a
greater chance to be still playing in theaters when the
February nominations are made, which in turn gives them
a greater chance than, say, the previous year's 1st
quarter releases to be still playing at awards time and
in the following weeks.
Sources. Adapted from Randy A. Nelson, Michael R.
Donihue, Donald M. Waldman, and Calbraith Wheaton, "What's
An Oscar Worth?" Economic Inquiry, January 2001, pp.
1-16.
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