Reviews, Reputation, and Revenue: The Case of Yelp.com
Luca, sole author of a working paper never published in a peer-reviewed journal. Restaurant ratings were matched to state revenue data, with a regression discontinuity on the displayed rounded rating. A one-star increase led to a 5 to 9 per cent increase in revenue, driven by independent restaurants with no effect for chains, and chains lost market share as the platform spread. Consumers responded more to visible quality changes and to ratings carrying more information.
Luca, sole author of a working paper never published in a peer-reviewed journal. Restaurant ratings were matched to state revenue data, with a regression discontinuity on the displayed rounded rating. A one-star increase led to a 5 to 9 per cent increase in revenue, driven by independent restaurants with no effect for chains, and chains lost market share as the platform spread. Consumers responded more to visible quality changes and to ratings carrying more information.
Written from the abstract read 2026-10-18.
What our sources record
Recorded when this source was checked, figures included, with page references and quotation marks removed.
Harvard Business School Working Paper 12-016, 41 pages, dated September 2011 and revised March 2016. doi:10.2139/ssrn.1928601.