Star Turnover and the Value of Human Capital—Evidence from Broadway Shows

Theater shows routinely turn over actors in lead roles. Otherwise, the show stays the same, including the director, the script, other actors and, the physical theater environment. Even the lines performed do not change the set. Therefore, the theater provides a unique laboratory for assessing the value of human capital to an enterprise, a question that has been studied in other contexts, including the CEO value literature. We compare revenues, capacity, and ticket prices just before and just after transitions of top cast members. We also characterize the performers in various ways and control for the attributes of the show and for team characteristics. We find that decorated theater stars significantly affect the financial success of theater shows, supporting the MacDonald version of the superstar hypothesis. Movie stars and celebrities do not seem to affect ticket prices or show revenues. Teams and seasonal effects seem to matter as well. This paper was accepted by Renee Adams, finance.

• 저널Management Science · 66(2) · 958–978
• 토픽Financial Markets and Investment Strategies · Finance
• DOI10.1287/mnsc.2018.3177
• 저자Shu Han, S. Abraham Ravid