NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Publications by Weijia Dai

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Working Papers and Chapters

November 2012Optimal Aggregation of Consumer Ratings: An Application to Yelp.com
with Ginger Z. Jin, Jungmin Lee, Michael Luca: w18567
Consumer review websites such as Yelp.com leverage the wisdom of the crowd, with each product being reviewed many times (some with more than 1000 reviews). Because of this, the way in which information is aggregated is a central decision faced by consumer review websites. Given a set of reviews, what is the optimal way to construct an average rating? We offer a structural approach to answering this question, allowing for (1) reviewers to vary in stringency (some reviewers tend to leave worse reviews on average) and accuracy (some reviewers are more erratic than others), (2) reviewers to be influenced by existing reviews, and (3) product quality to change over time. We apply this approach to reviews from Yelp.com to derive optimal ratings for each restaurant (in contrast with the arithmetic...

Contact and additional information for this authorAll publicationsWorking Papers only

 
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