A Meta-Analysis of Electronic Word-of-Mouth Elasticity

Abstract

The authors conduct a meta-analysis on the effect of electronic word of mouth on sales by examining 51 studies (involving 339 volume and 271 valence elasticities) and primary data collected on product characteristics (durability, trialability, and usage condition), industry characteristics (industry growth and competition), and platform characteristics (expertise and trustworthiness). Their analysis reveals that electronic word-of-mouth volume (valence) elasticity is .236 (.417). More importantly, the findings show that volume and valence elasticities are higher for privately consumed, low-trialability products that operate in less competitive industries and whose reviews are carried on independent review sites. Furthermore, volume elasticities are higher for durable goods and for reviews on specialized review sites, whereas valence elasticities are greater for community-based sites. Drawing on the results, they discuss several implications for managers and researchers and explain why valence elasticities are often found to be insignificant. Finally, they propose numerous directions for future research in the area on the basis of their findings.