Tuesday, December 22, 2015

The Daily Stat from Harvard Business Review

 


THE DAILY STAT: Harvard Business Review

December 21, 2015

How Useful Are Online Customer Ratings at Conveying Product Quality?


Average online customer ratings correlate poorly with Consumer Reports scores, the most widely used measure of objective quality in consumer behavior literature, according to a new study by Bart de Langhe, Philip M. Fernbach, and Donald R. Lichtenstein at the University of Colorado. For two randomly chosen products, there is only a 57% chance that the product with the higher average user rating is also rated higher by Consumer Reports, not much better than the flip of a coin. Analyzing 344,157 Amazon.com ratings of 1,272 products, the researchers find that user ratings are often based on small sample sizes that limit their informativeness. In fact, even price is better than user ratings at predicting Consumer Reports scores. So customers evaluating products based on the average user rating shouldn’t jump to conclusions about quality, the authors say.

Source: Navigating by the Stars: Investigating the Actual and Perceived Validity of Online User Ratings


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