Superstars without Talent? The Yule Distribution Controversy

Laura Spierdijk and Mark Voorneveld
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Laura Spierdijk: Department of Economics and Econometrics, University of Groningen
Mark Voorneveld: Department of Economics, Stockholm School of Economics, and Department of Econometrics and Operations Research, Tilburg University

The Review of Economics and Statistics, 2009, vol. 91, issue 3, pages 648-652

Abstract: Chung and Cox (1994) provided an intuitively appealing stochastic model indicating that superstars may exist regardless of talent, giving rise to the Yule distribution. We adopt a different empirical approach and test its goodness of fit using a parametric bootstrap and several powerful test statistics. Just like the discrete Pareto distribution, it is overwhelmingly rejected: it is a fairly accurate approximation of the lower quantiles of the superstar distribution but overestimates the snowball effect that makes consumers purchase records of the most successful artists. In other words, the Yule distribution captures stardom, but not superstardom. A generalization of the Yule distribution provides an excellent fit in two of the three data sets. Copyright by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Date: 2009

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