Do MPAA Ratings Affect Revenues at the Box Office? Daniel R. Ellis Georgia College & State University

Motion Picture Association of America Created in 1922 by major studio presidents to protect the industry from government censorship MPAA content rating system by Jack Valenti in 1968 Ratings are evaluated by boards comprised of “the average parent” G PG R X General Audiences Mature audiences Under 16 with parent Restricted under 16

Age Ratings G PG PG-13 R NC-17* Current system circa 1984 Minimal violence Some violence Unrealistic Violence Persistent Violence N/A No nudity Brief nudity Non-sexually-oriented Nudity Sexually-oriented nudity Aberrational Behavior No profanity Some profanity 1 “Fuck” Hard Language No drugs Drug use Drug abuse

2003 is the most recent observation in previous research Prior Literature Litman (1983) Prag & Casavant (1994) Stimpert & Laux (2008) Current Study Age Ratings Not Significant 2003 is the most recent observation in previous research

The Real World “The MPAA rating is so inextricably tied to commercial success in the United States that directors generally work under a contractual requirement that they deliver a film with a certain rating.” - Ridley Scott

Simple Statistics

Data Sample of 524 films from 1992 – 2011 Revenues were adjusted for inflation to 2012 Control variables Star Power Seasonality Sequel Studio Genre Release Quality Reviews Mean Std Deviation Min Max $112.43M $122.44M $4.95M $1.021B

Empirical Model Revenueit= Ratingit + Star_Powerit + Sequelit + Genreit + Qualityit + Seasonalityit + Studioit + Releaseit + Reviewsit + εit

Academy Award* Nominations Results Revenue in Millions Coefficient Standard Error P-value Star Power* 21.25 8.73 0.015 PG-13* 67.99 9.45 0.000 PG* 56.89 13.43 G 36.03 29.58 0.224 3-D 56.74 29.71 0.057 Sequel* 71.11 12.43 Animated* 46.90 22.07 0.034 Sci-Fi* 100.85 18.52 Action/Thriller* 52.83 12.10 Adventure/Family* 49.34 19.09 0.010 Comedy* 45.16 12.89 Average Review Score* 21.05 3.38 Academy Award* Nominations 16.57 2.90 Academy Award Wins* 15.01 5.10 0.003 Studio* 43.5 9.38 Constant -163.93 24.03

Academy Award* Nominations Revenue in Millions Coefficient Standard Error P-value Star Power -0.161 8.2 0.984 PG-13* 39.81 8.97 0.000 PG* 41.09 12.26 0.001 G 40.57 26.87 0.132 3-D 23.91 27.15 0.379 Sequel* 42.14 11.6 Animated -17.54 20.92 0.402 Sci-Fi* 69.55 17.06 Action/Thriller* 22.62 11.35 0.047 Adventure/Family 9.52 17.73 0.591 Comedy 23.17 11.86 0.051 Average Review Score* 19.13 3.07 Academy Award* Nominations 17.54 2.64 Academy Award Wins* 10.08 4.65 0.031 Studio* 21.03 8.77 0.017 Seasonal* 16.91 7.46 0.024 Release* 0.055 0.005 Constant -221.13 22.45

Limitations Marketing and Advertising Production costs Writer/Director Composer/soundtrack Release of competing films Unobserved Technological advances Domestic less than 50% of total revenue

Does the MPAA increase youth access to violence? Further Implications Does the MPAA increase youth access to violence? “Films that would previously have been rated R were increasingly assigned to PG-13.” “ The rating system has allowed increasingly violent content to enter the PG-13 category.” Recent study from the Annenberg Public Policy Center

Thank you