Forecasting Film Revenues Using GAMLSS

Abstract

This paper utilises the GAMLSS framework for the statistical modelling of movie box-office revenues. The dominant modelling paradigm of the film industry, traditionally exemplified by the nobody knows principle is based upon the infinite variance of the Pareto distribution. Using GAMLSS we have the flexibility to model up to 4 parameters of any distribution in terms of the avail- able explanatory variates, including a predictor that has smooth non-parametric functions. We here show that total box-office revenue can be better modelled by distributions with finite variance contradicting the Paretian hypothesis. Moreover the final version of the paper will illustrate that the Box-Cox power exponential distribution gives models where the parameters vary smoothly with an important explanatory variable, leading to the substantive conclusion that the post-opening revenue can, in fact, be explained by the opening box-office

Keywords: GAMLSS, film revenues, box-office revenues