Value of Stars on Broadway: A Case Study

Abstract

Highly qualified employees are a critical element of a service experience. Utilizing the theatre metaphor, we showcase a method to value these employees with a case study on Broadway. Using a novel data set that includes Broadway show revenues, private expense data, and actor usage, our case study shows that stars were associated with increased revenues in the weeks they were present. However, after taking into account their effects on surrounding weeks’ revenues, their impact was significantly less. After accounting for the costs of hiring a star, we estimate a positive but not statistically significant impact on profit. We discuss managerial implications for designers of service experiences.