Abstract
The paper studies economic efficiency in the motion pictures industry and its determinants. We use data envelopment analysis (DEA) to assess the efficiency of the movies’ resources (production, distribution, and marketing investments) used to generate outputs (audience and box office revenues). In addition, we investigate the relationship between efficiency and movie characteristics (e.g., genre, ratings, stardom, and reviews). Using a large dataset involving 898 movies and spanning 10 years of box office data, we show that our efficiency scores are reliable and valid. In addition, we find that the most significant drivers of efficiency are academy awards, sequels, genres, critics’ ratings, volume of user reviews, and studios. Other factors are found to have little or no effect on performance, namely user ratings, stardom, Motion Picture Association of America (MPAA) ratings, and seasonality.
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