Scandinavian Working Papers in Economics

SSE/EFI Working Paper Series in Economics and Finance,
Stockholm School of Economics

No 658: Superstars without talent? The Yule distribution controversy

Laura Spierdijk and Mark Voorneveld ()
Additional contact information
Laura Spierdijk: Dept. of Econometrics, University of Groningen
Mark Voorneveld: Dept. of Economics, Stockholm School of Economics, Postal: Stockholm School of Economics, P.O. Box 6501, SE-113 83 Stockholm, Sweden

Abstract: Chung and Cox (1994) provided an intuitively appealing stochastic model which indicates that superstars may exist regardless of talent and which gives 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.

Keywords: Superstardom; Yule distribution

JEL-codes: J31; L82; Z11

17 pages, First version: April 25, 2007. Revised: December 6, 2007. Earlier revisions: May 9, 2007, May 9, 2007, December 6, 2007.

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