In a study that gives new meaning to the term "dismal science," a pair of economists have found that a restaurant whose Yelp rating goes up by just half a star is more likely to sell out its 7 pm seats on a given night.
The authors, Berkeley professors Michael Anderson and Jeremy Magruder, studied 300 SF restaurants for their article in this month's Economic Journal. But since high-quality restaurants are more likely to have positive reviews, how did they control for the effect of Yelp on a restaurant's business? As it turns out, they were aided by one of the site's design quirks: restaurants with an average rating below 3.75 are listed as three-and-a-half star spots, while those above 3.75 get rounded up to four stars. This made it possible to compare similarly ranked restaurants on either side of the star rating (with averages of 3.74 and 3.76 stars, say) and see what the improved star wattage did to their bookings. Moving from 3 to 3.5 stars increased a restaurant's chance of selling out at prime time from 13% to 34%, while moving from 3.5 to 4 stars raised the likelihood of a sellout to 54%.
At the time of this writing, 3 people have found Anderson and Magruder's work "funny," 8 found it "cool," and 4 found it "useful."