Expert opinion and cuisine reputation in the market for restaurant meals

Abstract

As food is an experience good, the market for restaurant meals is a market where the cost of acquiring information regarding quality is relatively high. In such markets consumers often turn to reputation measures to guide purchase decisions. As Australia does not have a longstanding cuisine style of its own, and given Australia has been open to substantial immigration inflows since federation, it represents an especially appropriate market to study regarding the impact of individual restaurant reputation and collective cuisine reputation on meal prices. The following study uses the hedonic price approach to investigate the implicit price of individual reputation indicators, cuisine type reputation indicators and other objective indicators in the market for restaurant meals. The empirical findings presented suggest that both individual restaurant reputation and cuisine type reputation are important. Other important factors are shown to include the quality of the restaurant wine list, the availability of private dining rooms, and whether or not there is an outdoor dining option.

Keywords:

• expert opinion
• food
• hedonic pricing

JEL Classification::

• D12
• R22

Notes

¹ It is difficult to determine an appropriate exchange rate for converting Australian dollars into US dollars or Euros, but the 10 year average US-Australian and Euro-Australian exchange rates to April 2011 were 0.80 US dollars per Australian dollar and 0.61 Euros per Australian dollar.

² Percentage changes have been calculated using the Kennedy (1981) method, and the SE of the percentage change has been calculated using the van Garderen and Shah (2002) method.