Category Spanning, Distance, and Appeal

Abstract

A general finding in economic and organizational sociology states that producers and products that span categories lose appeal to audiences. This paper argues that the negative consequences of crossing category boundaries are more severe when the categories spanned are distant and have high contrast. Available empirical strategies do not incorporate information on distances among categories. Here we introduce novel measures to categorical distance and derive measures for grade-of-membership, category contrast and categorical niche width. Using the proposed measurement approach, we test our theory using data on online restaurant reviews in Los Angeles and San Francisco, and we find that the results confirm our predictions.