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THE ROLE OF ACTORS AND ACTRESSES IN THE SUCCESS OF FILMS: HOW MUCH IS A
MOVIE STAR WORTH?

Author(s): W. Timothy Wallace, Alan Seigerman and Morris B. Holbrook
Source: Journal of Cultural Economics, Vol. 17, No. 1 (June, 1993), pp. 1-27
Published by: Springer
Stable URL: http://www.jstor.org/stable/41810482
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THE ROLE OF ACTORS AND
ACTRESSES IN THE SUCCESS
OF FILMS: HOW MUCH IS A
MOVIE STAR WORTH?
W. Timothy Wallace,
Alan Seigerman,
Morris B. Holbrook
A bedrock issue in film and video research concerns the use of

empirical studies to guide production or program design. Such design
decisions exert a direct effect on financial success. And, for the film
industry in general and the Hollywood movie in particular, financial
performance is clearly the name of the game (Vogel 1990). Indeed, as
noted with understatement by Donahue (1987), "it soon becomes very
apparent that if one wants to create motion pictures in 'Hollywood,'
one needs to understand and accept the fact that filmmaking is a
business" (p. 283). From this business-oriented perspective, it follows
that the production of Hollywood films aims at pleasing the largest
possible audience of moviegoers (Austin 1989; Jowett 1976; Jowett and
Linton 1989; Vogel 1990).
In this connection, researchers have often studied the factors
associated with a film's audience-attendance figures or box-office
receipts (Austin 1989). Success at the box office translates directly into
rental income for the film distributor (i.e., the fees paid by the theaters
for showing the film) as a primary indicant of commercial success
(Jowett and Linton 1989, p. 24). Thus, as discussed by Austin (1989),
research has addressed such issues as the influence of external
economic factors (p. 35), the motivations for moviegoing (p. 50), the
effect of advertising (p. 67), the impact of critical reviews (p. 69), the
role of word-of-mouth (p. 72), and reactions to the MPAA parental
guidance ratings (p. 111). (See also Cameron 1986; Donahue 1987;
Eliashberg and Sawhney 1991; Hirschman and Pieros 1985.) Further,
as noted by Jowett and Linton (1989), a substantial but scattered body
of research has investigated the effects of Oscar Awards on box-office
success (Dodds and Holbrook 19 88; Litman 1983; Smith and Smith
1986; Sommers 1983-84). Yet - with the exception of an occasional
study on the role of genre or on such production elements as the
director, producer, and screenwriter (Austin 1989, p. 75; Kindem 1982,
p. 90) - relatively little research appears to have explored questions
associated with the design of the movie itself.
With respect to this latter issue, perhaps the most widely held and
devoutly cherished belief found within the motion-picture industry
concerns the role of actors and actresses as key design components
responsible for attracting a large audience of loyal fans (Donahue 1987,
p. 34, p. 191). Based on this faith in "star power," Hollywood has
traditionally relied on what Vogel (1990) refers to as "bankability" or
"clout" and what Powdermaker (1950) describes as a "star system" that
"provides a formula easy to understand and has made the production
of movies seem more like just another business" (p. 228). That "for-
mula" has resulted in payments to film stars such as Tom Cruise, Arnold
Schwarzenegger, Eddie Murphy, and Sylvester Stallone of $9, $12, $13,
and $20 million, respectively, for their appearances in Days of Thunder,
The Terminator IIt Beverly Hills Cop ; and Rocky V (Corliss 1991; Duffy
1991; Fabrikant 1990; Greenwald 1990; Grover 1991; Newcomb and
Schifrin 1990). Drawing on the work of Rosten (1941), Jowett and
Linton (1989) summarize the rationale for this star system as follows:
As Rosten...has pointed out, "Hollywood learned that pic-

tures with stars make money, and those without stars do
not - or do not make as much as they would if they featured
popular personalities.... The star system was hailed as the
foundation of movie prosperity." Today, the star system
(or perhaps "star-cult" would be a better term) continues
to be an important cornerstone in the production of
movies, and no major production can be contemplated
until a guaranteed successful box office personality has
agreed to star in it (p. 88).
Based on such convictions and beginning as early as 1929, Hol-

lywood has relied on various estimates of audience appeal in making
design-related casting decisions. For example, during the 1940s,
George Gallup's Audience Research Incorporated (ARI) performed
surveys to estimate the box-office attraction or "marquee value" of
different movie stars. The use of such measures responded in part to
the results of "ARI research indicating that a star's marquee value
accounted for some 16 percent of the variance in movie rentals" (Austin
1989, p. 11).
Somewhat paradoxically, both the review by Austin (1989) and that
by Jowett and Linton (1989) emphasize that what little empirical
research exists on the effects of star power tends to casťdoubt on the
monetary value of big-name movie stars as design elements in the
production of films. Corliss (1991) has recently presented a similar
conclusion in the popular press. But perhaps the most comprehensive
overview of this contentious issue appears in a chapter by Kindem
(1982) on "Hollywood's Movie Star System." Kindem (1982) begins by
acknowledging that
...the Hollywood star system is a business strategy designed

to generate large audiences and differentiate entertain-
ment programs and products, and has been used for over
seventy years to provide increasing returns on production
investments (p. 79).
However, Kindem also examines the empirical evidence bearing

on this claim. In this connection, he cites findings from a study by the
Gallup Organization that supported "the validity of the star system in
the 1940s by suggesting that marquee values accounted for about 26 to
27 percent of the variation in movie box-office success" (p. 84). Fur-
ther, Kindem reports that his own regression of film revenues on the
combined marquee values of their stars produced an R2 of 0.23 with a
highly significant effect of marquee value (p 0.0001) on a sample of 87
films from the 1940s.
By contrast, Simonet (1978, 1980) concluded that the causality ran

in the opposite direction on the grounds that "for nine players, marked
rises in marquee value occurred after - not before - release of a
top-grossing film" (quoted by Kindem 1982, p. 87). With similarly
skeptical implications, Garrison (1971) found that - for 62 movies from
the late 1960s - the box-office ratings given by theater owners were
related to box-office success in opposite directions for actresses (posi-
tively) as opposed to actors (negatively). This finding caused Garrison
to conclude that "it would appear that the money spent on highly
inflated salaries for stars was not productive" (quoted by Austin 1989,
p. 77).
Yet Kindern (1982) has suggested reasons for mistrusting the
results of the studies by Simonet and Garrison. Foremost among these
is the charge that "neither Garrison nor Simonet isolates consumer
demand for movie stars as an independent variable" (Kindem 1982, p.
92). In other words, both these authors used some measure of past
performance (e.g., past box-office success or ratings by theater owners)
to compose an aggregated one-variable representation of actor or
actress appeal for the film as a whole. Hence, the contributions of
separate film stars did not appear in the models that they tested. Nor
did their small samples of only 56 to 73 relatively ancient films attain
enough size or recency to warrant confidence in the reliability or
validity of their results. Thus, as Kindem (1982) concludes, "it is...dif-
ficult to refute the star system with analyses of data that do not properly
measure the significant construct of interest, namely consumer
demand for [specific] movie stars" (p. 92).
Clearly, then, the choice of what actors and actresses to include in
a film remains a potentially crucial aspect of movie design in the
motion-picture industry. Yet, thus far, we lack applications of sound
methods for determining the contributions to market success made by
the inclusion of various stars. Toward that end, the present study
proposes a method for investigating this issue and applies this ap-
proach illustratively to a large group of over one hundred actors and
actresses from a large sample of over sixteen hundred recent films. To
preview briefly, we shall examine the questions of which control vari-
ables explain the market success of these films in general and which
actors or actresses tend to enhance or detract from film revenues in
particular. In this connection, we shall describe and illustrate a method
that regresses rental incomes on various control variables and on
dummy variables coded to represent the performance of various film
stars as well as the manner in which that performance has changed over
the courses of the stars' careers.
Method
In general, we selected a group of popular movie stars and built a

data base of information on all the films in which they had appeared.
For each of these films, we collected data on various control variables
(such as production costs, country of origin, genre, and length in
minutes). Entering these control variables into a stepwise regression
to explain rental income (that portion of box-office receipts that is
returned to the film distributor), we derived a best-fitting equation to
control for the effects of extraneous factors (those not directly con-
nected with the movie stars of interest). Working with the residuals
from this model based on control variables (i.e., estimated minus actual
rental incomes), we then performed further stepwise regressions to
include dummy variables representing the presence or absence of each
actor or actress as well as the linear and quadratic interactions between
the star and the year in which the movie was released. These dummy
variables, when significant, indicated the incremental contributions of
various stars to rental revenues and - in some cases - showed significant
linear or curvilinear changes in the stars' contributions over the courses
of their careers.
Sample
Our sample of films consisted of 1,687 motion pictures released
between 1956 and 1988. These movies were chosen by virtue of includ-
ing at least one star from among a set of 111 actors and actresses that
had appeared in Quigle/s annual poll of the top box-office draws, as
reported by Screen World (1989) for the years from 1970 to 1988.
Specifically, Quigley (1990) surveys the motion-picture exhibitors each
year to determine the current top money-making stars. Hence, the
annual Quigley report gives a fair account of those actors and actresses
who appear to possess "star power" at a given moment.
Stars
To preserve relevance to the current market for motion pictures,

the set of stars chosen for study included only those actors and actres-
ses who were alive at the time of the data collection and who had made
at least seven films during the courses of their careers. This group of
movie stars contained the following 111 names.( Table 1)
For purposes of data analysis, these actors and actresses were
represented by 111 zero-one dummy variables, with each movie coded
"1" for those dummy variables indicating the stars who appeared in that
particular film and coded "0" for those pertaining to all the other stars.
These star-related dummy variables served as the bases for the key
independent variables of interest in explaining our major dependent
variable, rental income.
Dependent Variable: Rental Income

We used Rental Income as our measure for the market success of
each film. This dependent variable was measured in millions of dollars,
adjusted in some important ways described later. As noted earlier,
Rental Income refers to that portion of box-office receipts that is
Table 1. List of Movie Stars Used
in the Analysis
Allen Alda Woody Allen Julie Andrews

Allen Arkin Dan Akroyd Kevin Bacon
Warren Beatty Robbie Benson Candice Bergen
Jacqueline Bisset Marlon Brando Matthew Broderick
Charles Bronson George Burns James Caan
John Candy Dyan Cannon Chevy Chase
Cher Tommy Chong Jill Clayburgh
Glenn Close James Coburn Sean Conneiy
Kevin Costner Tom Cruise Robert De Niro
Danny DeVito Michael Douglas Richard Dreyfuss
Faye Dunaway Clint Eastwood Peter Falk
Sally Field Jane Fonda Peter Fonda
Harrison Ford Michael J. Fox James Garner
Teri Garr Richard Gere Mel Gibson
Whoopi Goldberg Louis Gossett, Jr. Gene Hackman
George Hamilton Tom Hanks Goldie Hawn
Katherine Hepburn Charlton Heston Dustin Hoffman
William Hurt Timothy Hutton Glenda Jackson
Diane Keaton Michael Keaton Kris Kristofferson
Jessica Lange Tom Laughlin Jack Lemmon
Rob Lowe Shirley Maclaine T. "Cheech" Marin
Dean Martin Steve Martin Marsha Mason
Walter Matthau Bette Midler Liza Minnelli
Dudley Moore Roger Moore Eddie Murphy
Bill Murray Paul Newman Jack Nicholson
Leonard Nimoy Nick Nolte Chuck Norris
Ryan O'Neal Tatum O'Neal Al Pacino
Gregory Peck Michelle Pfeiffer Sidney Poitier
Richard Pryor Robert Redford Christopher Reeve
Burt Reynolds A. Schwarzenegger George C. Scott
George Segal Tom Selleck William Shatner
Brooke Shields Sissy Spacek Sylvester Stallone
James Stewart Meryl Streep Barbra Streisand
Donald Sutherland Patrick Swayze Elizabeth Taylor
John Travolta Kathleen Turner J.-M. Vincent
Jon Voight Sigourney Weaver Raquel Welch
Gene Wilder Robin Williams Debra Winger
returned to the film distributor. For the 908 movies with rental incomes
of $3 million or greater, this figure represented total revenues received
by the film's distributor from domestic theater owners, as reported by
Variety (1990a). For the 779 poor-performing films with domestic
revenues of less than $3 million (below Variety's cutoff), Rental Income
was set at an approximation of $1.5 million (before the adjustments
described later). (Notice that, because rental incomes varied over a
range of over $168 million before adjustments, there is no reason to
fear that this approximation at the very low end would make any
important difference in the empirical results - especially not after the
adjustments explained in what follows.) On average, domestic rental
income represents 45 percent of domestic box-office receipts
(Donahue 1987, p. 34). However, this figure does not include sub-
sequent revenues from foreign, network-television, pay-cable, home-
video, and other ancillary markets (Donahue 1987; Vogel 1990).
Control Variables
In addition to data on the presence or absence of the movie stars

for each of the films in which any one of them had appeared, we
collected information on each of the movies included in the sample
with respect to a number of control variables. These control-variable
data came from various sources such as CineBooks (1989), Halliwell
(1987), Quigley (1990), and Variety (1990b). We shall describe each of
these control variables briefly so as to clarify their operational defini-
tions.
Yean The year of the film's domestic release (CineBooks 1989;

Halliwell 1987).
Rating: The film's rating by CineBooks (1989) on overall quality
from zero ("without merit") to five (**♦♦* = "masterpiece").
Parental Guide: A parental recommendation in which CineBooks
(1989) evaluates the style and content of each film according to its
suitability for children on a six-position continuum that ranges from
"good for children" (1) to "objectionable for children" (6) (used in place
of the MPAA rating, which was not available for films released during
the first third of the years covered).
Country: The film's country of origin - coded into three categories

indicated by two zero/one dummy variables to represent the United
States, other English-speaking countries, and non-English-speaking
countries, respectively (CineBooks 1989).
Minutes: The film's length of running time in minutes (Halliwell
1987; Quigley 1990).
Genre: A set of zero-one dummy variables representing the
Cinebooks (1989) classification of films' genres into 25 categories -
Action, Adventure, Biography, Children's, Comedy, Crime, Dance,
Disaster, Documentary, Drama, Fantasy, History, Horror, Musical,
Musical Comedy, Mystery, Prison, Religion, Romance, Science-Fic-
tion, Spy, Sports, Thriller, War, or Western.
Cost: The total costs and expenses involved in acquiring and
producing a film (in $ millions), including all overhead and interest
charges, as reported by Variety (1990b); for films too low in cost to be
covered by Variety , average production costs as reported by Quigley
(1990).
Data Adjustments
To achieve the best possible statistical fit, we applied a number of
theoretically appropriate adjustments to the data. We shall describe
each of these briefly.
Normalizations All continuous variables were normalized by

subtracting their means across the 1,687 movies. This adjustment helps
to reduce multicollinearity between linear and quadratic terms but
does not affect the shapes or overall R2 for the linear and curvilinear
relationships of interest.
Quadratic Terms To check for curvilinear effects, each con-
tinuous independent variable was represented both by its simple nor-
malized value and by this value squared. Significance of the quadratic
term would indicate a reliable departure from linearity in a given
relationship.
Deflator Because the value of the dollar has changed considerably
over the years from 1956 to 1988, we adjusted all monetary figures to
constant 1989 dollars by means of a deflator computed to reflect the
average movie-ticket prices prevailing in a given year. Therefore, in
what follows, we shall report the results for the ticket-price-deflated
measures in constant 1989 dollars.
Annual Means For each film, rental income (in constant 1989
dollars) was further adjusted by subtracting the mean rental income of
all movies in the sample released during the same year. This adjust-
ment has the effect of correcting for extraneous sources of variation
due to general economic trends or attributable to the fortunes of the
movie industry as a whole. In other research, such extraneous deter-
minants of industry performance might hold considerable interest in
their own right. Here, however, they were viewed as potential sources
of error and were controlled for by subtracting the annual means in
measuring Rental Income.
Star X Year and Star X Year2 interactions. Finally, for each actor
and actress separately, we tested for changes in market success over
the course of that star's career by including multiplicative interaction
terms to represent the Star X Year and Star X Year2 interactions
(where Star is a zero/one dummy variable and Year is a normalized
continuous variable). Inclusion of these extra interaction terms per-
mitted a clear interpretation concerning possible trends in the effect
of an actress' or actor's star power.
Interpretation.
A significant positive (or negative) regression coefficient for Star
would mean that, taking into account the fee paid to the actor or actress
as part of a film's cost, that particular star has tended to contribute a
significant additional increment (or decrement) to market success, as
measured by an incremental contribution to Rental Income beyond
that earned by the typical actor or actress in our sample of films. A
positive effect for Star would mean that, compared with the norm for
other actors and actresses, film producers would have had an economic
justification for paying that star an additional fee up to the amount
represented by the coefficient for that term (in millions of 1989 dol-
lars). A negative effect for Star would mean that, compared with the
market performance of others, he or she has tended to be overcom-
pensated by an amount equal to the relevant regression coefficient.
Meanwhile, a significant Star x Year coefficient would indicate a linear
trend in the incremental financial contribution of that particular actor
or actress over the course of his or her career, while a significant Star
x Year2 term would show that a curvilinear or possibly a nonmonotonic
trend has appeared in the relevant star's market value. We tested for
such effects of interest by means of regression analyses.
Analyses
Data analyses employed stepwise ordinary least-squares regres-
sion. Here, in general, stepwise procedures appear well-suited for our
present purposes because we were ultimately concerned with obtaining
estimates for the effects of the three star-related variables just dis-
cussed (i.e., identifying those with significant impacts on market suc-
cess in the past) and not with developing a model for purposes of
predicting future performance (which would have been subject to the
danger of search bias associated with the generalization of stepwise
results to new samples of data). Accordingly, we began by using
stepwise regression with a selection criterion based on a significance
level of p 0.10 to fmd the best model for explaining variance in Rental
Income using only the aforementioned control variables considered
alone. After finding the best-fitting model based on just these control
variables, we performed a second stepwise procedure on the residuals
from this first equation to select the Star, Star x Year, and Star x Year2
terms that explained significant incremental variance in residual Rent-
al Income. Here, for completeness and to provide a base line against
which to compare other effects, Year and Year2 were included in the
equation as a starting point. After that, to permit fully determining the
shape of the relationship for each relevant actor and actress, we
followed the rule that if Star x Year2 is significant, both Star x Year and
Star must also be included in the equation and, similarly, that if Star x
Year is significant, Star must also be included.
Graphical Displays
In addition to the tabular presentation of these results, we also
obtained graphical displays for those stars with significant regression
coefficients. The resulting figures plot the Estimated Residual Rental
Income against Year. Each graph provides a base line (at the level
where the Estimated Residual is zero) to represent the market perfor-
mance of the typical actors and actresses whose contributions (after
adjusting for Year and Year2) do not depart significantly from the
norm (associated with the aforementioned control variables). Each
actor or actress with a significant Star, Star x Year, or Star x Year2
coefficient appears as a flat, inclined, or curvilinear row or band of
estimated points - appropriately labeled - whose positions show the
effect of that star's market performance as compared to the norm
established by the base line for the remaining actors and actresses.
Results
First Regression. The first regression model explained about a

quarter of the variance in Rental Income. Specifically - based on the
control variables considered separately and including only those that
entered at a level of p 0.10 or better - the stepwise regression produced
a fit of R = 0.52 (F(15,1671) = 42.26, p 0.0001). Here, in one form
or another, all the types of control variables mentioned earlier entered
10
the equation, usually with highly significant contributions. These
statistically significant effects appear in Table 2.
As shown in Table 2, some of the important effects of control
variables are linear and therefore easy to envision. Thus, Parental
Guide contributes in the negative direction (p 0.05), with the implica-
tion that every successive level of offensiveness along the six-point
continuum from "good for children" to "objectionable for children"
subtracts about $1.8 million from the market success of a movie. By
contrast, producing a film in the United States (as opposed to a
non-English-speaking country) tends to add about $5.6 million to its
Rental Income (p 0.005). And eight Genre categories show positive
effects on market value: Adventure ($5.8 million), Comedy ($6 mil-
lion), Disaster ($31 million), Horror ($14 million), Musical ($8.8 mil-
lion), Religion ($17.5 million), Science Fiction ($25.6 million), and Spy
($7.8 million) (all significant at p 0.05, with three significant at p
0.0001). Further, as might be expected, the Cost of a film is positively
related to its market success (p 0.0001). However, when controlling
for the other factors included in the equation, the Rental Income of a
film tends to recapture only about half (45 cents) of an additional dollar
spent on production costs (a finding to which we shall return later for
discussion).
Two of the variables shown in Table 2 appear to exert curvilinear
effects on Rental Income, as indicated by the presence of quadratic
terms (both significant at beyond p 0.0005). Because the variables
have been normalized, these can be tricky to interpret without actually
plotting the curves in question over the range of the relevant data. Such
plots (omitted here to save space) suggest that the effect of Rating on
Rental Income is U-shaped. At the lowest rating level, an extra rating
point actually subtracts about $6 million from the market success of a
film. In other words, it appears that a bad movie has something to gain
from being as trashy as possible. At higher levels of quality, Rental
Income begins to increase with the movie's Rating until the last rating
point (i.e., the shift from **** to ****♦) is worth about $24 million in
terms of market success. Thus, for a good movie, it apparently pays to
strive for even greater excellence.
A simpler relationship pertains to the effect of Minutes on Rental

Income. Over the range in our data, this effect is rather flat for movies
short in duration. But, as their running time in minutes increases, the
effect of additional length appears to accelerate such that - at the top
11
Table 2. Results for Stepwise Regressions Using Control
Variables to Explain Rental Income
Independent Regression
Variable Coefficient t-Value p-Level
Intercept -12.78 -6.65 0.0001
Rating 7.50 12.00 0.0001

Rating 3.66 9.15 0.0001
Parental Guide -1.80 -2.40 0.02
Country - U.S. 5.62 2.93 0.003
Minutes 0.18 7.10 0.0001

Minutes 0.001 3.53 0.0004
Genres:
Adventure 5.76 2.09 0.04
Comedy 5.98 4.23 0.0001
Disaster 31.09 4.14 0.0001
Horror 13.96 3.05 0.002
Musical 8.81 2.22 0.03
Religion 17.47 2.08 0.04
Science Fiction 25.65 6.75 0.0001
Spy 7.77 1.95 0.05
Cost 0.45 7.86 0.0001
12
of the range (for the movies longest in duration) - an extra hour's length
contributes an incremental $25 million to Rental Income.
Second Regression
The second regression model - incorporating the effects of actors
and actresses - explained about a quarter of the remaining variance.
Specifically, the use of Year, Year2, Star, Star x Year, and Star x Year2
to explain residuals from the preceding model (based only on control
variables) produced a multiple regression fit of R = 0.47 (F(55,1631)
= 8.57, p 0.0001). Here, in effect, the control variables from the
preceding model (already accounted for in Table 2) plus the Intercept,
Year, and Year2 terms (presented at the top of Table 3) provide a base
line (applicable to all films) against which to compare the performan-
ces of those stars whose market success has departed from the norm.
The outcomes of these comparisons concerning the market success of
the various actors and actresses appear in the significant star-related
regression coefficients shown in Table 3. This table shows that twen-
ty-four actors and actresses contributed to rental incomes in patterns
that, for many cases, varied over the courses of their careers. By
comparison with the norm for actors and actresses in general, the
impact of these 24 stars on a film's Rental Income and how this impact
has changed over their careers need to be taken into account. The
manner in which these effects have occurred appears most clearly in
the visual representations to which we now turn.
Graphical Analysis
Guides to interpreting the coefficients shown in Table 3 appear in
the graphs presented in Figures 1 through 4. These graphs plot the
estimated departures from the base line just described (vertical axis)
against the year of the film's release (horizontal axis) for each of the 24
actors and actresses with significant star-related regression coeffi-
cients in Table 3 (as identified by the legend that accompanies each
figure). Here, the base-line performance of the typical actor or actress
appears as a horizontal line across the middle of each display (at zero
on the vertical axis). Meanwhile, the incremental contributions of the
24 stars listed in Table 3 - and the manners in which these have changed
over the courses of their careers - appear as individually labeled rows
or bands of points that can easily be compared with the norm estab-
lished by the base-line performance. These comparisons reveal some
interesting findings.
13
Table 3. Results for Stepwise Regressions Using Year,
Year2 Star, Star X Year and Star X Year2 to Explain
Residuals from the Model Based on Control Variables
Intercept -1.27 -1.39 0.17
Year -0.13 -1.73 0.08

Year2 - 0.02 -2.46 0.01
Julie Andrews -4.42 -0.40 0.69

Andrews X Year -8.32 -7.48 0.0001
Andrews X Year2 0.68 4.46 0.0001
Kevin Bacon 306.56 3.16 0.002

Bacon X Year -52.67 -2.92 0.004
Bacon X Year2 2.15 2.76 0.006
Marlon Brando 22.90 3.55 0.0004

Brando X Year 1.92 2.46 0.01
James Coburn -5.90 -1.43 0.15

Coburn X Year 1.11 1.77 0.08
Tom Cruise -85.07 -2.04 0.04

Cruise X Year 8.82 2.70 0.007
Robert De Niro -9.32 -1.57 0.12

De Niro X Year -6.26 -3.28 0.001
De Niro X Year2 0.46 3.14 0.002
Danny DeVito 14.19 2.73 0.006
Richard Dreyfuss 30.58 3.70 0.0002

Dreyfuss X Year 1.46 0.63 0.53
Dreyfuss X Year2 -0.27 -1.72 0.09
Clint Eastwood 9.68 2.63 0.009

Eastwood X Year 0.78 1.87 0.06
Harrison Ford 31.74 4.57 0.0001

Ford X Year 5.99 4.59 0.0001
Ford X Year2 -0.39 -3.28 0.001
14
Table 3 - Continued
Charlton Heston -19.39 -3.28 0.001

Heston X Year 0.23 0.27 0.79
Heston X Year2 0.45 4.83 0.0001
Dustin Hoffman 17.89 3.33 0.0009
Jessica Lange 49.92 2.28 0.02

Lange X Year -3.64 -1.90 0.06
Tom Laughlin 40.60 3.48 0.0005

Laughlin X Year -5.59 -2.02 0.04
Laughlin X Year2 -0.57 -2.52 0.01
Bette Midler -36.85 -2.46 0.01

Midler X Year 3.72 2.90 0.004
Eddie Murphy -803.98 -1.84 0.07

Murphy X Year 124.17 1.82 0.07
Murphy X Year2 -4.41 -1.69 0.09
Bill Murray 22.50 3.37 0.0008
Paul Newman 12.31 2.26 0.02

Newman X Year -0.36 -0.73 0.46
Newman X Year2 -0.14 -2.63 0.009
Al Pacino 24.97 2.88 0.004

Pacino X Year -2.64 -2.00 0.05
Robert Redford 22.63 3.81 0.0001

Redford X Year 1.51 1.75 0.08
Redford X Year -0.18 -2.20 0.03
Burt Reynolds 11.49 3.23 0.001
Sylvester Stallone -0.42 -0.03 0.98

Stallone X Year 2.65 1.86 0.06
Barbra Streisand 18.14 2.92 0.004
John Travolta 96.50 4.18 0.0001

Travolta X Year -7.12 -2.56 0.00
15
As shown in Figure 1, the presence of some stars in a film (Burt
Reynolds, Danny DeVito, Dustin Hoffman, Barbra Streisand, and Bill
Murray) has tended to exert a positive impact that has remained
relatively constant above the base line over the period of the stars'
careers (ranging from about $11.5 million for Reynolds to about $22.5
million for Murray). Others shown in Figure 1 have followed a steady
downward trend over their careers (Al Pacino, Jessica Lange, and John
Travolta). In all three cases, these stars began at from $30 to $70
million above the base line, but then regressed back toward the norm
as their careers unfolded.
Figure 2 shows six actors and actresses who have achieved a steady
upward trend in market power during the span of their activity in the
movies (Marlon Brando, James Coburn, Tom Cruise, Clint Eastwood,
Bette Midler, and Sylvester Stallone). Some, for example, have started
near the base line and then risen to levels of incremental contribution
well above the $30 million mark (Brando, Stallone, and Cruise).
Others have begun at substandard levels but have progressed to con-
tributions somewhat above the norm (Coburn and Midler).
The stars presented in Figure 3 have pursued nonmonotonic
patterns of recovery (Julie Andrews, Kevin Bacon, Robert De Niro,
and Charlton Heston). These have involved declines during their early
years, followed by resurgences in the later stages of their careers. For
example, both Charlton Heston and Julie Andrews began their careers
at over $90 million above the base line, sank to $20 or $30 million below
the standard, and then rebounded to a level comfortably above the
norm. Both Kevin Bacon and Robert De Niro have pursued similar
but less dramatically sweeping paths of decline and recovery.
Finally, Figure 4 features six actors whose market success appears
to have peaked and then subsided (Richard Dreyfuss, Harrison Ford,
Tom Laughlin, Eddie Murphy, Paul Newman, and Robert Redford).
Some of these began near or below the base line, achieved peaks well
above the norm, and then fell back to standard or substandard market
performance (Laughlin, Newman, and Redford). One began high, but
has subsequently peaked and declined to below the norm (Dreyfuss).
Two appear to have peaked, but still remain well above the standard
set by the base line (Ford and Murphy).
Explanatory Power
An important remaining question concerns the relative degrees of
explanatory power contributed by (1) the adjustment for annual mean
16
FIGURE 1
PLOTS OF ESTIMATED RESIDUAL RENTAL INCOME VERSUS YEAR

WHEN USING STAR ANO STAR X YEAR
TO PREDICT DEVIATIONS FROM THE BASE LINE:
SIMPLE AND NEGATIVE LINEAR EFFECTS
17
FIGURE 2
PLOTS 07 ESTIMATED RESIDUAL RENTAL INCOME VERSUS YEAR

WHEN USING STAR AND STAR X YEAR
POSITIVE LINEAR EFFECTS
18
FIGURE 3

WHEN USING STAR, STAR X YEAR, AND STAR X YEAR-SQUARED
TO PREDICT DEVIATIONS FRON THE BASE LINE:
NONMONOTONIC RECOVERY EFFECTS
19
FIGURE 4

WHEN USING STAR, STAR X YEAR, AND STAR X YEAR-SQUARED
NONMONOTONIC PEAKING EFFECTS
20
Rental Income, (2) the effects of the control variables, and (3) the
additional contribution of the star-related variables in accounting for
the residuals from the model based on the control variables. Con-
clusions on this issue appear when regressing Rental Income on (1) a
series of dummy variables representing the years in which the films
were released (which has the effect of removing the annual means), (2)
the year dummies plus the control variables, and (3) the year dummies
plus the control variables plus the star-related variables. The variances
explained by these three regressions are (1) R2 = 0.03 (F(32,1654) =
1.68, p 0.01); (2) R2 = 032 (F(47,1639) = 16.38, p 0.0001); and (3)
R2 = 0.47 (F(100,1586) = 14.23, p 0.0001). This means that, overall,
our models explain close to half the variance in Rental Income (47
percent). Of this, the adjustment for annual means accounts for only
3 percent. The control variables explain an additional 29 percent of
the variance. The star-related variables contribute another 15 percent
to the overall variance explained. Thus, the star-related variables
account for close to a third of the total explained variance. [Viewed
differently, the variances explained in the residuals after the effects of
the preceding variables have been removed are R2 = 0.28 for the
control variables (Table 2) and R2 = 0.22 for the star-related variables
(Table 3), respectively. This means that the star-related variables
account for about 22 percent of the variance in Rental Income that
remains after the influence of the other variables has been removed.]
Discussion of Results and Limitations
As in any correlational study of market performance, our findings

are subject to certain limitations that suggest some important caveats.
First, it is possible that our results might have differed if we had

drawn upon a different group of actors and actresses or a different set
of films. We do believe that our large samples of 111 stars and 1,687
movies lend assurance that the findings possess some degree of
reliability and stability. Nevertheless, other film and video researchers
might want to see what would happen to the results if stars or movies
of particular relevance to their own interests were included in the
analysis or if directors and producers were added as explanatory
variables.
Second, the set of control variables that we used could conceivably

have omitted some film-specific factors of importance. For example,
it is possible that movie-advertising expenditures, special merchandis-
ing promotions, press coverage, word of mouth, time of the year at
21
which a motion picture was released, degree of compatibility among
the people working on the film, or other uncontrolled variables might
influence market performance. We had no access to such data and
must therefore assume that, if included in the analysis that led to Table
1, they would not have markedly affected the regression results for the
star and star x year interaction terms of interest in Table 3. However,
the exploration of such potential biases remains an important topic for
future research.
Third, our measure of market success does contain some imper-

fections. As previously mentioned, it was necessary to estimate the
rental incomes of films below $3 million as $1.5 million (in current
dollars before making the adjustments described earlier). This as-
sumption could introduce minor inaccuracies in some instances. How-
ever, the $1.5 million estimate anchors the low end of a performance
continuum that extends across a range of over $168 million. With such
a wide-ranging dependent variable, a possible inaccuracy of no more
than about $1 million at the low end of the range would not tend to
make much of a difference in the overall results.
Fourth, as also mentioned earlier, our measure of rental income

did not account for performance in other ancillary markets (network
broadcasts, home video, pay cable, foreign distribution, etc.). Possibly,
some films that perform poorly (well) in national theater distribution
might succeed (fail) when aimed at other audiences. Indeed, this
seems a likely explanation for how the coefficient on production costs
could fall below 1.0. Specifically, the incremental contribution of Cost
to Rental Income in Table 2 appears to be only about 0.45. This may
validate a piece of conventional wisdom in the film industry to the effect
that many films overspend on production costs and consequently lose
money in their domestic theater release but recoup these losses in other
markets such as network television, cable TV, videocassette sales, and
foreign distribution. Due to limitations in the available data, the
present study could not capture the effects of these ancillary markets.
Fifth, under some circumstances, stepwise procedures of the type

used here can inject search bias into the results of regression analyses.
For example, this problem becomes especially serious when one in-
tends to use the regression equation for purposes of prediction on a
new sample. However, our purpose here was not prediction but rather
estimation of the effects for stars with significant incremental impacts
on market success. Stepwise regression appears well-suited for the
latter purpose.
22
Conclusions
Subject to these limitations, our proposed method appears to

provide a viable approach in the illustrative example to the problem of
estimating the market values of movie stars by identifying how their
incremental contributions to rental income have diverged from the
base line for other actors and actresses and by indicating how those
contributions have changed over the courses of individual careers.
Using just the annual means and other control variables (rating, paren-
tal guide, country, minutes, genres, cost, etc.), our model explained 32
percent of the variance in film rentals. Including the stars and the star
X year interaction terms increased explained variance to 47 percent.
This increase of about 15 percent due to the presence of the actors and
actresses themselves accounts for about a third of the overall variance
explained and happens to coincide quite closely with the figure derived
by the George Gallup Association many years ago (Austin 1989; Jowett
and Linton 1989) but subsequently disputed in more recent work by,
among others, Simonet (1978, 1980) and Garrison (1971). Hence, with
respect to this controversy, we tend to agree with Kindem (1982) in
concluding that certain movie stars do make a demonstrable difference
to the market success of the films in which they appear. Further, our
results suggest that this incremental contribution of stars to the market
success of films in which they appear can be measured using something
like the method proposed and illustrated here.
Extensions
Our findings permit other derivations that might be of interest to

students of the film industry. The pattern of findings shown in Table
1 supports the emerging concern that many films tend not to earn back
their exorbitant production costs during their initial release in domes-
tic theaters. Apparently - after accounting for critical appraisal, length
in minutes, country of origin, genre, and other potentially confounded
factors - incremental production costs generate only about 45 cents of
rental income on the dollar. This finding might encourage one to adopt
a more conservative stance in comparison with the blockbuster men-
tality that has often swept away Hollywood producers (Fabrikant;
Greenwald; Landro).
Further, where financial return (rather than artistic merit) is the
primary objective, one might lean in the direction of producing horror,
religion, disaster, and science-fiction films (which contribute $14,
$17.5, $25.7, and $31 million, respectively) while avoiding some of the
23
omitted categories (such as biographies, dramas, and romances) like
the plague. However, one might also keep in mind that - for high-
quality films near the top of the scale - even a one-point rating increase
(which would presumably reflect the excellence of a film's direction,
scripting, music, technical production, etc.) appears to be worth
enough (about $25 million) to counterbalance the poor performance
of a noncommercial genre.
Finally, based on the kind of analysis illustrated here, those con-
cerned with problems of film design in motion-picture production
might reach helpful conclusions concerning the justification of addi-
tional fees paid to certain actors or actresses (Chisholm 1990). For
example, as indicated in Figure 1, Bill Murray, Barbra Streisand, and
Dustin Hoffman qualify as bona fide financial "superstars" whose
market appeal would merit payments above the level of those already
included in the production costs of the films in which they have
appeared. Similarly, as suggested by Figure 2, the contributions to a
film's success associated with Marlon Brando, Sylvester Stallone, and
Tom Cruise have established the commercial "star power" of these
movie actors.
By contrast, Figure 1 shows that - during the period covered by our

analysis - the market value of some stars such as Al Pacino, Jessica
Lange, and John Travolta appears to have plummeted from its once
lofty perch. Declines of comparable magnitude have also befallen the
stars featured in Figures 3 and 4, where the difference concerns a
comparison between the patterns of peaking and those of recovery.
Thus, in Figure 3, both Charlton Heston and Julie Andrews appear to
have enjoyed resurgences after long but precipitous periods of decline.
By contrast, in Figure 4, Tom Laughlin, Harrison Ford, and Eddie
Murphy all appear to have peaked spectacularly only to hit the skids
in their later films.
Summary
In sum, the proposed approach to estimating the worth of a movie
star in terms of his or her incremental contribution to a film's market
success appears to have yielded some plausible and potentially useful
illustrative findings. For example, while no model can guarantee an
accurate prediction of tomorrow's results, the approach proposed and
illustrated here does appear to provide a helpful procedure for deter-
mining whether a given star has been under- or over-compensated in
the past.
24
Apparently, in 1989, one would not have wanted to base the next
salary for Al Pacino, Jessica Lange, Paul Newman, or Richard Dreyfuss
on what they had made in their last few movies because the model
suggests that, relative to the base line, they had tended to be overpaid.
Conversely, one might have justified additional payments to Bill
Murray, Dustin Hoffman, or Barbra Streisand on the basis of their
historical tendencies to contribute positively to a film's market success.
Thus, as one potential input to cinematic product design, we have

proposed and illustrated a method for estimating the incremental
market value of film stars. Besides indicating differences in the con-
tributions to market success made by various actors and actresses, our
results show that their relative degrees of star power have tended to
change over the courses of their careers. This demonstration of our
approach suggests that it can contribute to the better design of films,
can provide information useful in justifying the salaries of movie stars,
and might thereby help to rationalize the troubled economics of the
motion-picture industry.
Columbia University
References
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27

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THE ROLE OF ACTORS AND ACTRESSES IN THE SUCCESS OF FILMS: HOW MUCH IS A

MOVIE STAR WORTH?

A bedrock issue in film and video research concerns the use of

As Rosten...has pointed out, "Hollywood learned that pic-

Based on such convictions and beginning as early as 1929, Hol-

...the Hollywood star system is a business strategy designed

However, Kindem also examines the empirical evidence bearing

By contrast, Simonet (1978, 1980) concluded that the causality ran

In general, we selected a group of popular movie stars and built a

To preserve relevance to the current market for motion pictures,

Dependent Variable: Rental Income

Allen Alda Woody Allen Julie Andrews

In addition to data on the presence or absence of the movie stars

Yean The year of the film's domestic release (CineBooks 1989;

Country: The film's country of origin - coded into three categories

Normalizations All continuous variables were normalized by

First Regression. The first regression model explained about a

A simpler relationship pertains to the effect of Minutes on Rental

Intercept -12.78 -6.65 0.0001

Rating 7.50 12.00 0.0001

Parental Guide -1.80 -2.40 0.02

Country - U.S. 5.62 2.93 0.003

Minutes 0.18 7.10 0.0001

Cost 0.45 7.86 0.0001

Intercept -1.27 -1.39 0.17

Year -0.13 -1.73 0.08

Julie Andrews -4.42 -0.40 0.69

Kevin Bacon 306.56 3.16 0.002

Marlon Brando 22.90 3.55 0.0004

James Coburn -5.90 -1.43 0.15

Tom Cruise -85.07 -2.04 0.04

Robert De Niro -9.32 -1.57 0.12

Danny DeVito 14.19 2.73 0.006

Richard Dreyfuss 30.58 3.70 0.0002

Clint Eastwood 9.68 2.63 0.009

Harrison Ford 31.74 4.57 0.0001

Charlton Heston -19.39 -3.28 0.001

Dustin Hoffman 17.89 3.33 0.0009

Jessica Lange 49.92 2.28 0.02

Tom Laughlin 40.60 3.48 0.0005

Bette Midler -36.85 -2.46 0.01

Eddie Murphy -803.98 -1.84 0.07

Bill Murray 22.50 3.37 0.0008

Paul Newman 12.31 2.26 0.02

Al Pacino 24.97 2.88 0.004

Robert Redford 22.63 3.81 0.0001

Burt Reynolds 11.49 3.23 0.001

Sylvester Stallone -0.42 -0.03 0.98

Barbra Streisand 18.14 2.92 0.004

John Travolta 96.50 4.18 0.0001

PLOTS OF ESTIMATED RESIDUAL RENTAL INCOME VERSUS YEAR

PLOTS 07 ESTIMATED RESIDUAL RENTAL INCOME VERSUS YEAR

PLOTS OF ESTIMATED RESIDUAL RENTAL INCOME VERSUS YEAR

PLOTS OF ESTIMATED RESIDUAL RENTAL INCOME VERSUS YEAR

As in any correlational study of market performance, our findings

First, it is possible that our results might have differed if we had

Second, the set of control variables that we used could conceivably

Third, our measure of market success does contain some imper-

Fourth, as also mentioned earlier, our measure of rental income

Fifth, under some circumstances, stepwise procedures of the type

Subject to these limitations, our proposed method appears to

Our findings permit other derivations that might be of interest to

By contrast, Figure 1 shows that - during the period covered by our