Publications
Publications
- 2022
Consumer Reviews and Regulation: Evidence from NYC Restaurants: Evidence from NYC Restaurants
By: Chiara Farronato and Georgios Zervas
Abstract
We investigate the informativeness of hygiene signals in online reviews, and their effect on consumer choice and restaurant hygiene. We first extract signals of hygiene from Yelp. Among all dimensions that regulators monitor through mandated restaurant inspections, we find that reviews are more informative about hygiene dimensions that consumers directly experience—food temperature and pests—than other dimensions. Next, we find causal evidence that consumer demand is sensitive to these hygiene signals. We also find suggestive evidence that restaurants that are more exposed to Yelp are cleaner along dimensions for which online reviews are more informative.
Keywords
Restaurants; Reviews; Hygiene; Yelp; Regulation; Food; Governing Rules, Regulations, and Reforms; Consumer Behavior
Citation
Farronato, Chiara, and Georgios Zervas. "Consumer Reviews and Regulation: Evidence from NYC Restaurants: Evidence from NYC Restaurants." NBER Working Paper Series, No. 29715, February 2022.