Can Lower Expert Opinions Lead to Better Consumer Ratings?: The Case of Michelin Stars
41 Pages Posted: 4 Dec 2022
Date Written: November 13, 2022
Expert opinion exerts tremendous influence on the purchase journey, but its effect on overall consumer experience is ambiguous as it can give rise to both “expectation” and “reputation” effects. This paper explores the effect of expert opinions on consumer experience via the lens of consumer reviews in the restaurant industry, where the expert opinions are conveyed by Michelin stars. We construct a unique data set based on the Michelin Guide for Great Britain & Ireland from 2010 to 2020. The data include consumer reviews on TripAdvisor for all restaurants that were awarded Michelin stars during these 11 years, and a large pool of potential control restaurants. We apply two synthetic-control-based methods to estimate the effect of Michelin star changes on the sentiment and content of consumer reviews. We find that decreases in Michelin stars improve consumer review ratings, suggesting that the expectation effect of expert opinions is stronger than the reputation effect. The analysis of review content further shows that service and “value for money” appear to be the key drivers of the customer experience. When a restaurant loses or receives fewer Michelin stars, consumers become less demanding on service aspects and also focus less on value considerations. We discuss the implications of our findings for restaurant managers, the Michelin Guide, and other businesses that provide experience goods.
Keywords: Expert Opinions, Consumer Reviews, Restaurant Industry, Michelin Star Ratings, Synthetic Control Methods
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