Measuring the Effect of EWOM Readability and Sentiment on Sales

Abstract

With the emergence of the internet as a popular source of information as well as a mass communication channel where peoples share their opinions regarding the quality of products/services, their pre- and post-purchase experiences, electronic word of mouth (EWOM) has become an interesting area of research to determine its role on the customer attitude and loyalties at the individual level and product sales at the market level. The impact of EWOM readability, length, and sentiment along with product ratings and price on the sales rank of cell phones has not been thoroughly investigated in the literature. To address this research gap, the authors propose three econometric models to assess the influence of EWOM measures on product sales. This modeling approach allows us to investigate the extent of influence of sentiment and readability scores on the endogenous variable namely sales rank. The utility of this incremental approach is reinforced by the high value of adjusted R^2 square achieved.