World Media Economics and Management Conference 2016

Estimating the demand of books is an important management task for publishing companies due to (1) the high set-up costs of printing and (2) potential excess inventory costs. In addition, in countries with fixed book prices laws (e.g., Germany) management options to steer the demand of books over time are limited, thus underlining the relevance of forecasts. This study demonstrates that relatively simple quantitative models can effectively support managers in predicting sales in the category of children’s and young adult literature books. Based on a sample of 542 children’s and young adult literature books sold in Germany, we identify relevant drivers for sales using market response models. We find that model based results consistently outperformed management predictions by a large German publishing company on a holdout sample. Publishing companies could easily adopt the model developed in this study in order to supplement or replace current prediction heuristics used by management, thereby reducing risks of uncertainty for business planning.